In a groundbreaking move, South Korea’s elite ‘Virtual Asset Crime Joint Investigation Group’ has launched a comprehensive probe into allegations of cryptocurrency fraud involving prominent players in the digital asset space – Delio, Haru Invest, and WEMIX. The Joint Investigation Group, a specialized unit formed to combat cybercrime and safeguard the integrity of the crypto market, has taken the reins in what could be one of the most significant investigations in the country’s digital asset history.
South Korea Ramps Up Fight Against Crypto
The Virtual Asset Crime Joint Investigation Team of the Seoul Southern District Prosecutor’s Office, which was inaugurated on the 26th, has initiated an investigation into three separate allegations of cryptocurrency fraud.
As reported by JoongAng Ilbo on the 27th, the investigation encompasses three cases. These include allegations of fraudulent activities by executives from Delio and Haru Invest, suspicions of fraud by the executives of the Pica Project, the issuer of Pica, and potential fraudulent activities by the executives of WeMade, the issuer of Wemix. The Virtual Assets Corporation is involved in the investigation of these cases.
The newly formed joint unit is reportedly prioritizing swift resolution of existing cases. This strategy is being implemented by most of the first division prosecutors, including Deputy Prosecutor Ginoseong, who previously led the virtual asset corruption investigation team and is now assigned to the joint unit. This approach underscores the commitment of the joint unit to efficiently address and resolve ongoing investigations.
In a related development, the 6th Detective Division is persistently investigating the case involving Kim Nam-guk, an independent lawmaker suspected of holding a substantial amount of coins. The complexity of this case is heightened as some allegations against Congressman Kim are intricately linked with suspicions of illegal market-making by Wemix. Given these intertwined issues, it is increasingly likely that a joint investigation with the Virtual Asset Crime Joint Investigation Team will be necessary.
This potential collaboration between the joint unit and the 6th Detective Division could streamline the investigation process, allowing for a more comprehensive and efficient examination of the allegations. It also highlights the seriousness with which South Korean authorities are addressing potential fraud and corruption within the cryptocurrency sector.
The Special Team Consists Of 30 Officers
The Seoul Southern District Prosecutors’ Office will be home to the Joint Investigation Centre for Crypto Crimes, a specialized unit composed of 30 investigators. These investigators will be sourced from various government agencies and organizations, including the prosecution, the Financial Supervisory Service, the National Tax Service, and the Korea Customs Service. This multi-agency collaboration aims to bring a diverse range of expertise to the table, enhancing the effectiveness of investigations into cryptocurrency-related crimes.
The newly formed unit will primarily focus on cryptocurrencies with high price volatility or those at risk of de-listing. It will also tackle illegal trading practices like market manipulation and insider trading, and investigate tax evasion, unauthorized foreign exchange transfers, and concealment of criminal profits related to crypto transactions.
A significant part of their mandate will be to combat money laundering activities using cryptocurrencies.
The investigation into Delio, Haru Invest, and WEMIX is a pivotal moment in South Korea’s crypto history. It underscores the government’s determination to regulate the digital asset market and protect investors from potential fraud.
The Prosecutor’s Office, in a statement, implied that virtual assets, with daily trades exceeding 3 trillion won (~$2.35 million) and participation from over 6 million individuals, have become investment products on par with stocks.
However, they expressed concern that the existing laws and systems are not fully equipped to handle this new asset class, leaving market participants essentially unprotected by the law.
