Lee Jeong-ryeol, the head of the Seoul Southern District Prosecutors’ Office’s joint crypto investigation unit in South Korea, has emphasized the need for courts to deliver swifter justice in cases related to cryptocurrencies. He believes that regulation rollouts and punishment for crypto-related crimes have been slow, leading to the virtual assets market becoming a lawless zone. Lee stated that investigations, trials, and sentencing must be sped up to restore trust in the market and help victims recover their funds. He argued that despite the novel aspects of crypto-related crimes, they are fundamentally no different from conventional financial fraud and can be addressed through an integrated government response combining new IT technologies.
The South Korean government is taking steps to combat the surge in cryptocurrency-related crimes and fraud cases by establishing a permanent virtual asset investigative unit. Lee’s team, established in July 2023, is the nation’s first and only dedicated cryptoasset investigation organization, comprising professionals from various government agencies. Since its inception, the unit has been handling a wide range of cases, including a high-profile art-themed altcoin case involving corruption within law enforcement, illegal OTC trade networks amounting to around $478 million, and investigations into entities like Haru Invest and the crypto lending platform Delio. Lee acknowledged the challenges faced by the unit, as they often deal with cases that have no existing legal precedent, such as those involving alleged South Korean “scam coins” designed to deceive people for financial gain.
Lee emphasized the importance of swift investigations and trials to prevent further financial losses and aid victims in recovering their funds. He highlighted the need for an integrated government approach to address the evolving nature of financial and high-tech crimes in the crypto space. Lee also pointed out that despite the technological advancements involved in crypto-related crimes, the essence of stealing property through deception remains consistent, which allows investigative agencies and courts to adapt to the changing landscape effectively. He stressed the urgency of addressing the problem of fast-evolving financial crimes through quick and efficient responses to protect investors and uphold the integrity of the virtual assets market.
The unit’s work has been crucial in tackling first-of-their-kind cases involving crypto-related crimes that push the boundaries of existing legal frameworks. Lee’s team has encountered challenges in investigating complex cases with no precedents, requiring innovative approaches to navigate uncharted territory. Cases like the alleged South Korean “scam coins” highlight the prevalence of fraudulent schemes aimed at defrauding individuals and making money through deception. Recent incidents, such as an armed robbery targeting an OTC crypto buyer, underscore the risks associated with cryptocurrency transactions and the importance of robust investigative efforts to combat illicit activities in the digital asset space.
Lee Jeong-ryeol’s leadership of the joint crypto investigation unit underscores the commitment of South Korean authorities to address the growing threat of crypto-related crimes and fraud. By prioritizing swifter justice through enhanced investigative processes and expedited trials, the government aims to restore trust in the virtual assets market and protect investors from fraudulent activities. The establishment of a dedicated virtual asset investigative unit signifies a proactive approach to combatting financial crimes involving cryptocurrencies, highlighting the need for collaboration across government agencies to address the challenges posed by the evolving crypto landscape. As South Korea continues to strengthen its regulatory framework and enforcement mechanisms, the unit’s efforts play a vital role in safeguarding the integrity of the virtual assets market and ensuring accountability for those involved in illegal activities.
