- Trending
- Comments
- Latest
South Korea has shut down its prosecutor-led crypto crime unit and moved major cryptocurrency investigations to a new national agency that launched on October 2 with about 66% of its authorized staff and no formally installed chief.
The Serious Crimes Investigation Agency (SCIA) took over major investigative functions from prosecutors, including the work of the Virtual Asset Crime Joint Investigation Department. A new Virtual Asset Joint Investigation Division inside the SCIA’s Seoul regional office will now handle South Korea crypto crime cases alongside specialists from other government bodies.
The change does not end South Korea’s specialized crypto enforcement. It moves that capability out of the prosecution service and into a separate investigative agency.
South Korea launched the SCIA and a restructured prosecution service on Friday, ending the system in which prosecutors could both conduct investigations and decide whether to bring charges. Prosecutors lose their independent investigative powers and will focus on indictments and court prosecutions.
The SCIA takes over investigations in seven categories of serious crime, including economic crime, corruption, cybercrime, drug offences, defense-procurement crime and national-security-related offences.
The Interior Ministry says the agency has an authorized workforce of 2,874, including 2,567 investigators. It is starting with about 1,900 staff, roughly 66% of full strength. According to Yonhap, 42 prosecution departments that previously performed investigations have been abolished, with their investigative functions moving to the new agency.
The prosecutor-police Virtual Asset Crime Joint Investigation Department, which operated from the Seoul Southern District Prosecutors’ Office, ended operations as the new criminal procedure system took effect. Its role, along with joint teams covering financial crime and voice phishing, is moving into joint divisions within the SCIA.
The Interior Ministry confirmed that the Seoul regional SCIA will include dedicated joint divisions for:
Separate joint teams covering drugs and national fiscal crime will operate in other regional offices. The divisions are designed to bring together personnel from police, tax authorities and financial regulators.
That multi-agency structure matters for crypto, where investigators often need law-enforcement powers, blockchain analysis, exchange records, financial intelligence and rapid asset-freezing requests working at the same time.
South Korea is one of the world’s most active cryptocurrency markets, with major exchanges including Upbit and Bithumb operating under an increasingly detailed regulatory system. Its specialized prosecutors have also been central to major market-manipulation, token-fraud and exchange investigations.
Under the old joint model, prosecutors took part directly in investigations and handled legal issues such as search warrants, arrest warrants and charging strategy while police and other specialists did the investigative work. The new system removes that direct role.
Yonhap reported that some within the prosecution service fear specialist expertise in complex financial cases could weaken, particularly in investigations involving difficult legal questions and complicated money flows.
The government’s answer has been to build permanent specialist units inside the SCIA rather than abandon the joint model. Interior Minister Yun Ho-jung said at the launch that separating investigation from indictment should not divide institutional responsibility, and called for close cooperation between the agencies to avoid gaps in criminal cases.
Virtual assets look set to remain a dedicated enforcement area rather than being folded into a generic financial-crime department. The agency’s structure also includes specialist financial, cyber and forensic capabilities, which could expand South Korea’s crypto-investigation capacity if the SCIA succeeds in combining personnel from prosecutors, police and financial agencies under one command.
But the transition opens with open questions. The SCIA is starting with about 1,900 of its 2,874 authorized positions filled, and it launched before an inaugural chief had formally taken office, with leadership and staffing arrangements still being completed.
Those gaps could matter when investigators need to respond quickly to hacks, token manipulation or transfers of suspected criminal assets.
One of the most important things to watch is what happens to major crypto cases already underway. The previous unit had built experience in tracing blockchain transactions, obtaining exchange records and coordinating with financial regulators.
The new framework is meant to preserve that function through the SCIA’s crypto division, but prosecutors now sit on the charging side rather than inside the investigative team.
That makes the first major crypto case under the new structure a test. A large exchange hack, a market-manipulation probe or a fraud case requiring immediate wallet freezes would show whether the split between investigators and prosecutors creates delays, or whether the specialist structure lets investigations move faster.
South Korea has not stepped back from virtual-asset enforcement. It has changed who investigates it.
The prosecutor-led crypto unit is gone, but a dedicated virtual-asset division now sits inside a national agency whose mandate includes major economic and cybercrime. The question is whether the new system can keep the expertise, speed and coordination that major crypto cases increasingly require.
Copyright © 2025 - The Bit Gazette.
