South Korea adopts LEI and crime unit to strengthen crypto regulation.
South Korea adopts LEI and crime unit to strengthen crypto regulation.
The Rise of Blockchain Technology in South Korea
South Korea, known for its technological advancements and thriving cryptocurrency market, has taken a significant step in combating cryptocurrency crimes and ensuring investor protection. To address the rise in illicit activities in the market, an interagency investigation unit has been established. This move aims to crack down on criminal activities and enhance the stability of the virtual asset market.
The Joint Investigation Centre for Crypto Crimes
The Seoul Southern District Prosecutors Office, in collaboration with several government agencies and bodies, has formed the Joint Investigation Centre for Crypto Crimes. Comprising 30 investigators, including representatives from the prosecution, Financial Supervisory Service, National Tax Service, and Korea Customs Service, among others, this unit will play a crucial role in investigating cryptocurrency-related crimes.
The unit’s primary objective is to identify irregular trading activities and probe associated criminal activities. By scrutinizing market players involved in issuing or distributing cryptocurrency, the investigation unit aims to eliminate risks and maintain the stability of the initial virtual asset market. Moreover, the unit will expedite the investigative process for crypto-related criminal cases, covering detection, analysis, and handling.
Safeguarding Crypto Investors Through Legislation
The establishment of the Joint Investigation Centre for Crypto Crimes aligns with South Korea’s recent legislation to safeguard crypto investors. The National Assembly has passed a first-of-its-kind law that introduces penalties, including prison sentences and fines, for individuals engaged in unfair trading practices, market manipulation, and illicit transactions involving virtual assets. This legislation demonstrates the government’s commitment to ensuring a secure and transparent cryptocurrency market.
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Encouraging the Usage of Legal Entity Identifier (LEI)
In addition to the establishment of the investigation unit, the Korea Securities Depository has entered into a business agreement with Code, a company specializing in travel rules in Seoul. The collaboration aims to encourage the issuance and usage of Legal Entity Identifier (LEI) in the virtual asset market.
The LEI is a standardized ID given to corporations worldwide participating in financial transactions. It originated after the 2008 financial crisis as a means of efficiently managing financial transaction information. Now, with the support of Code, virtual asset operators in South Korea will be encouraged to obtain LEIs. This initiative will facilitate reporting and supervising due diligence, benefiting not only businesses but also financial institutions and regulatory authorities.
Furthermore, the adoption of LEI will replace the current Foreign Investment Registration Certificate (IRC) starting in December for enhanced transparency. This shift demonstrates South Korea’s commitment to staying at the forefront of regulatory compliance and ensuring accountability within the virtual asset market.
The Future of Blockchain in South Korea
The establishment of the Joint Investigation Centre for Crypto Crimes and the promotion of LEIs in the virtual asset market showcase South Korea’s determination to foster a secure and thriving blockchain industry. By cracking down on illicit activities and promoting transparency, the government aims to attract more investors and improve market confidence.
As the blockchain industry continues to evolve, South Korea’s proactive approach and stringent regulations can serve as a model for other countries. This milestone underscores the nation’s dedication to embracing blockchain technologies and protecting the interests of its citizens.
In conclusion, the establishment of the investigation unit and the adoption of LEIs represent a significant development for the blockchain industry in South Korea. Through these measures, the government demonstrates its commitment to combatting cryptocurrency crimes, ensuring investor protection, and fostering a transparent and trustworthy virtual asset market. With such initiatives in place, South Korea remains at the forefront of global blockchain innovation.
