A South Korean prosecution unit dedicated to investigating cryptocurrency-related crimes is facing a significant challenge as it deals with an overwhelming number of cases. This specialized unit is part of the Seoul Southern District Prosecutors’ Office and was previously known as the Financial and Securities Crime Coalition Team. It has gained a reputation as the “Yeoido Grim Reaper” due to its location in Seoul’s Yeoido district, where numerous government organizations are based. The unit was initially established to handle conventional financial crimes but was officially disbanded four years ago. However, in response to the growing threat of cryptocurrency-related crimes, the Justice Ministry ordered the revival of this unit last year.
The unit’s first case involved the investigation into Terraform Labs, CEO Do Kwon, and other executives, as well as the LUNC cryptoasset. Since then, the unit has been inundated with complex cases, such as the recent transfer of the ClubRare metaverse firm’s case. ClubRare has been accused of making false promises to investors, specifically regarding the listing of two tokens on centralized crypto exchanges. These promises were allegedly not fulfilled, leading a group of investors to claim damages worth $7.4 million. However, concerns have been raised about the capacity of the Seoul Southern District Prosecutors’ Office and its crypto unit to handle such investigations.
In an effort to address this issue, the unit underwent a transformation in July of this year. It was reestablished as a cross-department, crypto-specific unit with approximately 30 staff members. Despite these changes, the unit continues to struggle with the increasing number and complexity of crypto crime cases. Legal experts and officials within the legal community have emphasized the need for additional support for the unit to effectively carry out its investigations.
The Challenges Faced by the Crypto Crime Unit
The Seoul Southern District Prosecutors’ Office and its crypto unit are facing significant challenges due to the overwhelming number of crypto crime cases they are handling. The unit’s workload has increased since its revival and restructuring last year. It now faces highly complex cases involving various aspects of cryptocurrency, including:
- Fraudulent practices by crypto companies
- False promises made to investors
- Unfulfilled commitments regarding token listings
Despite the unit’s efforts to tackle these cases, concerns have been raised about its capacity to effectively investigate and prosecute crypto criminals. An anonymous former prosecutor stated, “The unit needs more support to handle the growing number of cases.” The legal community calls for additional resources and expertise to be allocated to the unit to strengthen its capabilities in combating crypto crime effectively.
