Prosecutors Call for Amendments to Special Financial Transaction Act to Early Freeze Criminal Proceeds in Virtual Assets

A proposal has emerged suggesting that the Financial Intelligence Unit (FIU) should be able to early freeze assets held in domestic exchanges for up to six months if criminal proceeds are converted into virtual assets. Kim Byeong-jin, a prosecutor at the Seoul Central District Prosecutors' Office, presented a plan for establishing an FIU-led early freeze system for digital assets in his paper titled 'Conversion of Criminal Proceeds into Digital Assets and Introduction of Early Freeze System.' Prosecutor Kim pointed out that while it is possible to trace the movement of digital assets, actual recovery is a separate issue. He analyzed that under the current system, it is difficult to prevent the transfer of criminal proceeds, and assets could be moved to other wallets in situations requiring international cooperation. The paper proposes a structure where virtual asset service providers freeze assets after a review by the FIU upon request from investigative agencies, emphasizing that the freeze should be limited to digital assets recognized as related to criminal proceeds. The initial freeze period is suggested to be set at two months, with the possibility of extending it up to six months if necessary. This system is explained as a temporary measure to hold criminal proceeds before they can be transferred abroad, rather than replacing seizure or confiscation procedures.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.