South Korea’s Biggest Exchanges Pen Crypto Crime-fighting Deal with Police

Crypto Exchange South Korea

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 26, 2023

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The five biggest crypto exchanges in South Korea have signed a “crypto crime-fighting” MOU deal with the nation’s police force – and will work with officers fighting crypto-powered money launderers and crypto scam artists.

According to Fn News, the exchanges – the market-leading Upbit and Bithumb, as well as Korbit, Coinone, and Gopax – have agreed to work with police investigations into “crimes related to virtual assets” and “prevent damage” to investors.

The police explained that the rate of crime “in the investment sector” was now on the rise and spoke of a fast-developing crypto and stock investment “craze.”

Officers also noted that the size of the domestic crypto market is continuing to rise – although the past few months have seen a slowdown with the onset of the bear market.

But, they noted, more and more South Koreans are now becoming crypto investors. 

And this, they stated, was leading to a rise in opportunistic crime, as scammers attempt to deceive the victim with promises of “guaranteed high-profit” crypto investments and crypto wallet hacking cases. They also claimed that some criminal groups were known to be using crypto to “launder illegal funds.”

‘Crypto Crime-fighting’ Deal – What Went on Behind the Scenes?

Officers stated that the “need to cooperate with exchanges” has been growing, particularly during the investigation process, where police detectives often need to follow a trail of crypto transactions.

The National Police Agency revealed that it has been “collaborating” with individual exchanges since April this year to establish a network of “hotlines” – allowing exchanges to relay relevant information to the police.

The police also claim that they will continue to bolster cooperation by “sharing information” with exchanges on “cryptoasset-related crime investigations, damage prevention, the seizure of criminal proceeds, and money laundering prevention measures.”

The five trading platforms are the only exchanges that are currently licensed to operate in the fiat KRW markets, and all five have commercial banking partners. Last month, the Chief Legal Officer at Dunamu, Upbit’s operator, welcomed talk of fresh regulations for the crypto sector.