Club Rare Fraud Case Transferred to Seoul Central District Prosecutors' Office
The Seoul Southern District Prosecutors' Office, which houses the Financial Crime Investigation Division and the Joint Investigation Unit for Virtual Asset Crimes, recently transferred a coin fraud-related complaint case to the Seoul Central District Prosecutors' Office, drawing attention to the background of this move. There are reports within the legal community that the Seoul Southern District Prosecutors' Office is overwhelmed with financial and virtual currency crime cases, suffering from excessive workload and manpower shortages.
On the 25th, the Seoul Southern District Prosecutors' Office transferred the 'Club Rare fraud suspicion case,' assigned to the 5th Criminal Division (Chief Prosecutor Heo Ji-hoon), to the Seoul Central District Prosecutors' Office. This case involves the virtual currency issuing company Club Rare, which promoted that their virtual currencies Agob and Impower would be listed on centralized virtual currency exchanges (CEX) and received investments accordingly, but allegedly failed to carry out the business as promoted. On the 20th, 38 cryptocurrency investors filed a complaint against Club Rare's CEO Jeong Mo (43) for violations including fraud under the Act on the Aggravated Punishment of Specific Economic Crimes, claiming damages of 10 billion KRW.
Prosecutor General Lee Won-seok is seen touring the investigation unit office after the plaque ceremony at the launch event of the Joint Investigation Team for Virtual Assets held on the afternoon of July 26 at the Seoul Southern District Prosecutors' Office in Yangcheon-gu, Seoul. Photo by Kang Jin-hyung aymsdream@
However, there are remarks in the legal community that the Seoul Southern District Prosecutors' Office lacks the capacity to conduct investigations as typical virtual currency fraud suspicion cases are being handled by the Seoul Central District Prosecutors' Office. Lee Jae-hwan, a lawyer at Law Firm Pyeongan representing the Club Rare case, said, "When filing the complaint, we requested the prosecutors to have the newly established Virtual Asset Joint Investigation Unit at the Seoul Southern District Prosecutors' Office handle the case." He added, "But we heard from the prosecutors that the Virtual Asset Joint Investigation Unit did not have the capacity, so the case was sent to the Seoul Central District Prosecutors' Office." When asked whether the lack of investigative capacity was the reason for not handling the Club Rare case, a Seoul Southern District Prosecutors' Office official said, "It is difficult to comment on the reason for the transfer."
The Seoul Southern District Prosecutors' Office re-established the 'Financial and Securities Crime Joint Investigation Unit' last May, which had been disbanded during the Moon Jae-in administration. In July of this year, it launched the Virtual Asset Joint Investigation Unit with about 30 personnel, taking on cases related to virtual currency crimes. Since last year, numerous related cases have passed through or are under investigation by the Seoul Southern District Prosecutors' Office. These include the 'Terra-Luna crash incident' with damages reaching 59 trillion KRW, the 'Ra Deok-yeon and associates SG Securities incident,' 'lawmaker Kim Nam-guk's virtual currency holding suspicion,' the 'Wemix issuance fraud case,' and the 'Lee Hee-jin scam coin fraud case.' Recently, it has also taken on investigations into the 'Kakao SM Entertainment price manipulation suspicion' and the 'Youngpoong Paper and Daeyang Metal price manipulation suspicion.'
The workload overload at the Seoul Southern District Prosecutors' Office is also evident in the number of unsolved cases currently under investigation. According to data received by Kim Seung-won, a member of the National Assembly's Legislation and Judiciary Committee from the Democratic Party of Korea, from the Ministry of Justice, as of August this year, the Seoul Southern District Prosecutors' Office had a total of 3,035 unsolved cases. Other district prosecutors' offices in Seoul?Seoul Western District Prosecutors' Office, Seoul Eastern District Prosecutors' Office, and Seoul Northern District Prosecutors' Office?had 1,941, 1,734, and 1,358 unsolved cases respectively, roughly half the number of the Seoul Southern District Prosecutors' Office. Amid this situation, the manpower at the Seoul Southern District Prosecutors' Office has decreased. A Seoul Southern District Prosecutors' Office official said at a recent press briefing, "With six prosecutors reduced, it was inevitable to readjust work such as case reassignment and coordination."
Within the legal community, there are opinions that support is needed for the Seoul Southern District Prosecutors' Office. A former prosecutor turned lawyer said, "The Seoul Southern District Prosecutors' Office is the only investigative agency handling virtual currency-related investigations, but support for prosecutors and investigative personnel is insufficient." He added, "Government ministries and the National Assembly, as well as political circles, say they are simultaneously promoting and regulating the financial and virtual currency industries, but if this situation continues, essential investigations into related crimes may become impossible."
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