South Korea Officially Launches Crypto Crime Unit to Tackle Fraud

Highlights:

• South Korea has launched a permanent crypto crime unit to fight fraud.
• The unit has indicted 74 people and arrested 25 suspects since its inception.
• Authorities believe the unit will improve cooperation to deal with crypto fraud.

The Seoul Southern District Prosecutors’ Office has officially launched the Joint Investigation Unit (JIU) to help fight crimes related to cryptocurrencies. The unit began two years ago as a temporary task force to address the growing number of crypto fraud cases. However, authorities decided to establish it as a permanent body following growing crypto adoption and crime.

South Korea establishes a dedicated body for crypto crime investigations.

The investigative unit consists of 34 staff members, including 11 financial regulators, under the supervision of the Seoul Southern District Prosecutor’s Office.

Since 2023, the unit had a temporary… pic.twitter.com/ogHLBqviVf

— TU_Crypto_News (@TU_Crypto_News) February 28, 2025

The JIU now has 34 full-time employees, made up of prosecutors, officials of the Financial Services Commission, and the Financial Supervisory Service. The staff has had previous experience with handling crypto-related fraud cases. The unit will probe insider trading, alteration of prices, and other illegal crypto activity.

Officials hope that formalizing the unit will enhance the fight against crimes in the crypto field. Prosecutors at the launch stressed the need for stronger enforcement as the market grows. The new unit will empower law enforcement to better cope with crypto-related complex crimes.

The unit will work with other agencies to oversee the industry. Investigators will also partner with organizations from different countries to investigate and prosecute international crypto crimes. Officials believe that the cooperation will prevent criminals from taking advantage of gaps in regulations.

Crackdown on Crypto Fraud Intensifies Amid Rising Cases

Since its establishment, JIU has indicted 74 individuals and arrested 25 individuals involved in crypto fraud. The unit has dealt with several high-profile cases of scam coins and illegal fund transfers.

One of the biggest cases the unit has handled involved a scam coin called Queen Bee. The investigation found the scheme had defrauded investors and, therefore, caused major financial losses. A well-known shaman, Jeon Seong-bae, was indicted by authorities for handling illegal political funds during the 2018 local elections. Investigators say he used crypto transactions to conceal the funds.

The unit also arrested a crypto CEO accused of manipulating prices to earn $4.8 million in illegal profits. Prosecutors say price manipulation is one of the most common crypto fraud methods. Last December, the JIU arrested the CEO of a coin management company who allegedly made illegal profits through crypto price manipulation. Investigators tracked transactions to uncover the scheme.

Balancing Crypto Oversight with Industry Growth

At the same time, South Korea is pushing for the adoption of cryptocurrencies. The Financial Services Commission plans to allow corporations to open real-name bank accounts for crypto assets. Authorities have stated that the move will enable the industry to grow responsibly.

In a related development, BDACS, a South Korean crypto custody provider, has partnered with Ripple Labs to strengthen the security of digital assets. The collaboration will enable institutions in South Korea to safely hold XRP, RLUSD, and other cryptocurrencies.

BREAKING 🚨

Ripple announces a strategic partnership with BDACS, a South Korea-based digital asset firm, to provide institutional-grade custody service for XRP and RLUSD.

Ripple unveiled the partnership today, noting that it aligns with South Korea's Financial Services… pic.twitter.com/ukwoXDYHbQ

— Calvin Grech (@grech29) February 27, 2025

The partnership will allow BDACS to integrate Ripple’s custody solution to strengthen security for digital asset holders. Ripple custody solutions support crypto custodians, exchanges, and over-the-counter trading platforms.

The move by the government to form a permanent unit hopes to strike a balance between innovation and protecting investors. These initiatives are part of a long-term strategy to regulate and develop the crypto market.