South Korean prosecutors have assembled a joint task force to monitor the cryptocurrency and fintech industry while protecting consumers, amid an 800% rise in crypto- and fintech-related fraud crimes.
The group was created for the sole purpose of fighting crimes involving fraudulent, high value-added business schemes often associated with cryptocurrencies. Prosecutors say these crimes rose from just 53 in 2016 to 453 in 2017, with around 4,590 prosecutors dealing with such cases by 2018.
A team of professional investigators and prosecutors will lead the task force, collaborating around the country to safeguard investors and working to recover damages. The task force’s roles and functions will also be disseminated through inspection meetings and surveillance conferences held with heads of relevant departments, while responding to crimes that cause widespread damage to the public.
The task force will function similar to a research police department, with prosecutors proposing that its responsibilities include tracking accounts and freezing them after detecting illegal activity. The team will also be tasked with determining the best course of action for retrieving stolen funds and applying the necessary recovery methods. Prosecutors will also coordinate with related governmental organizations and councils that play major roles in pushing cases through the system.
In making their case for creating the Task Force, prosecutors cited multiple instances of high-profile fraud in South Korea’s blockchain space, including Bithumb, Upbit, and several others in 2018. In June of that year, a miscellaneous domestic crypto company called Daegu stole approximately US$9.7 million in damages to 20,000 victims. Eight lenders in October were indicted for stealing about US$62.1 million in damages to 12,000 victims through a peer-to-peer platform scam.
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