South Korean Crypto Crime Unit Faces Surge in Cases, Struggles with Workload

South Korea’s specialized prosecution unit for crypto crimes is grappling with a surge in cases, just a year after its inception.

This unit, functioning under the Seoul Southern District Prosecutors’ Office, was previously recognized as the Financial and Securities Crime Coalition Team. It’s colloquially termed the Yeoido Grim Reaper, referencing the Seoul district housing many major governmental bodies.

Previously tasked with traditional financial crimes, the team was disbanded roughly four years prior. However, in response to the rising crypto-related crimes, the Justice Ministry reinstated the unit, reorienting its focus solely on significant cryptocurrency offenses.

One of its inaugural investigations revolved around Terraform Labs, its CEO Do Kwon, other executives, and the LUNC crypto asset.

Asia Kyunjae noted an emerging sentiment in the legal domain, stating, “There is talk [in the legal community] that the [unit] is grappling with an overwhelming caseload and a shortage of staff as crypto-related criminal cases multiply.”

Recently, the unit received a case concerning a metaverse company, ClubRare, charged with deceiving its investors. Allegedly, the company pledged to list two of its tokens on centralized crypto exchanges but hasn’t fulfilled this claim. Consequently, investors are alleging the CEO of ClubRare contravened the Act on Aggravated Punishment of Specific Economic Crimes, causing a collective damage of $7.4 million.