[Invest&Law] Seoul Nambu District Prosecutors' Office and Financial Supervisory Service Joint Workshop Held... "Preparing for the July 19 Virtual Asset Act Enforcement"

Seoul Southern District Prosecutors' Office and Financial Supervisory Service.
[Photo by Yonhap News]

With the Virtual Asset User Protection Act (hereinafter referred to as the Virtual Asset Act) coming into effect on the 19th of this month, the prosecution and the Financial Supervisory Service (FSS) are also busy responding. Investigation agencies have announced their intention to restore market order through "strict investigations."

On the 15th, the Seoul Southern District Prosecutors' Office and the FSS held their 5th joint workshop at the FSS headquarters in Yeouido, Seoul. This workshop was organized to share preparation statuses between the two agencies ahead of the Virtual Asset Act's enforcement and to strictly respond to unfair trading practices. The Virtual Asset Act, which is just around the corner, focuses on protecting virtual asset users, prohibiting unfair trading practices, and strengthening financial authorities' supervision. The two agencies have held four joint workshops since April this year.

Attendees at the workshop included Shin Eung-seok, Chief Prosecutor of the Southern District Prosecutors' Office; Kim Jong-woo, Deputy Chief Prosecutor of the Southern District Prosecutors' Office; Park Geon-wook, Head of the Virtual Asset Crime Joint Investigation Unit; Lee Bok-hyun, Governor of the FSS; and Kim Byung-chil, Deputy Governor.

Through the joint workshop, the Southern District Prosecutors' Office's Virtual Asset Crime Joint Investigation Unit presented cases of virtual asset crime investigations conducted so far and shared practical know-how with the FSS. Specifically, they introduced cases investigated under existing criminal law before the enforcement of the Virtual Asset Act, such as 'scam coin issuance' and 'price manipulation.' They also predicted that after the enforcement of the Virtual Asset Act, the punishment paradigm for fraudulent acts in the market, including insider trading, price manipulation, and fraudulent unfair trading, will change.

The FSS demonstrated its self-developed virtual asset unfair trading analysis platform and analytical techniques built in the first half of this year. This trading analysis platform was created as a high-performance web server system suitable for processing large-scale trading data submitted by virtual asset exchanges, reflecting the characteristics of the virtual asset market. As a result, simple and repetitive calculation tasks are automated during the analysis of price manipulation records. It also includes functions such as suspicious transaction group analysis, trade reproduction, statistical extraction, and connectivity analysis.

Meanwhile, the two agencies plan to further strengthen institutional cooperation in line with the enforcement of the Virtual Asset Act. The FSS stated that in cases requiring rapid compulsory investigation, it will consult with the Financial Services Commission and transfer cases to the prosecution via a fast track.

Chief Prosecutor Shin of the Southern District Prosecutors' Office explained, "Since the Virtual Asset Act was enacted last July and the Virtual Asset Crime Joint Investigation Unit was launched at the Southern District Prosecutors' Office, investigations into scam coin issuers and price manipulators have been actively conducted. In line with the law's enforcement, the Southern District Prosecutors' Office and the FSS have diligently prepared by holding several workshops and practical meetings."

He added, "Since the two agencies have a precedent of contributing to the establishment of financial market order, if we combine our efforts, the establishment of order in the virtual asset market will also be achieved. The Southern District Prosecutors' Office will firmly and strictly respond to unfair trading practices in virtual assets together with the FSS."

Governor Lee of the FSS stated, "Ahead of the law's enforcement, the financial authorities have steadily carried out related regulatory revisions, built supervision and investigation infrastructure, and checked business operators' regulatory compliance. Based on this, after the law's enforcement, we plan to establish market discipline through strict and prompt supervision, inspection, and investigations of unfair trading."

He continued, "However, regulatory blind spots still remain, so continuous efforts to supplement the virtual asset regulatory system are necessary, and organic cooperation among related agencies to respond to unfair trading is also required. I hope this workshop will serve as a foundation for enhancing the investigation and prosecution capabilities and strengthening cooperation between the FSS and the Southern District Prosecutors' Office."

Reporter Lim Hyun-kyung, Law Times