South Korea’s dedicated unit for investigating cryptocurrency crimes is facing tremendous challenges just over a year after its launch. Operating as a part of the Seoul Southern District Prosecutors’ Office and formerly known as the Financial and Securities Crime Coalition Team, this unit, humorously referred to as the Yeoido Grim Reaper, was initially responsible for conventional financial crime. However, it was disbanded around four years ago. Last year, the Justice Ministry ordered its revival with a sole focus on combating high-level crypto-related offenses.
An Overload of Work
The first case assigned to the Grim Reaper involved the investigation of Terraform Labs, CEO Do Kwon, and other executives, along with the LUNC cryptoasset. Unfortunately, as crypto-related crime incidents increase, there are growing concerns within the legal community that the unit is now bearing the weight of an overwhelming workload. Reports suggest that the unit suffers from both an excess of work and an understaffing problem.
The most recent incident being transferred to the Grim Reaper involves the metaverse firm ClubRare, which stands accused of misleading its investors with false promises. Allegedly, the firm claimed that two of its tokens would be listed on centralized crypto exchanges but failed to fulfill those promises. Investors have come forward, accusing the ClubRare CEO of violating the Act on Aggravated Punishment of Specific Economic Crimes, alleging a combined total of $7.4 million worth of damages.
According to sources within the “legal community,” it is believed that the Seoul Southern District Prosecutors’ Office, along with its crypto unit, lacks the capacity required to effectively carry out investigations of this nature. Notwithstanding the unit’s makeover in July of this year, which transformed it into a cross-department crypto-specific entity consisting of approximately 30 staffers, it continues to grapple with an increasing number of complex crypto cases.
The burdened unit has left many legal officials calling for additional support. An anonymous former prosecutor highlights the unit’s plight, stating, “The unit is the only public authority that investigates crypto assets, but it has no support and is understaffed.” To successfully revitalize the crypto industry, politicians, including government ministries and the National Assembly, must recognize and address the need for bolstering the resources of this critical unit.
As the Yeoido Grim Reaper fights to navigate the treacherous landscape of crypto crime, it becomes clear that greater attention and support are necessary. Only with a stronger foundation can this unit rise to the challenge of combating the ever-evolving world of cryptocurrency crimes and safeguard the country’s financial ecosystem.
