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| The three suspects in this combined image are alleged to have abducted and murdered a 48-year-old woman who lived in Seoul's Gangnam District on March 29. From left, Lee Kyeong-woo, Hwang Dae-han and Yeon Ji-ho. Courtesy of Seoul Metropolitan Police |
Legal loopholes in cryptocurrency trade pose multiple risks to investors
By Lee Yeon-woo
The recent abduction and murder of a woman in Gangnam District in Seoul involved cryptocurrency investments, prompting experts to point out that a lack of proper regulation of crypto exchanges is poses financial risk to investors, while the instance of crypto-related crimes soars.
Police have shifted the focus of investigation to determine whether someone orchestrated the murder of the 48-year-old woman in Seoul's Gangnam District to seek revenge for a failed investment.
On Wednesday, a man suspected of contracting the suspects to murder the woman, identified only by his surname Yoo, was arrested in Yongin. Yoo and his wife, surnamed Hwang, are suspected of providing tens of millions of won to Lee Kyeong-woo, one of the suspects apprehended earlier this week. His identity was revealed with two other suspects, Hwang Dae-han, and Yeon Ji-ho, later in the interest of public safety, according to the police.
"We believe releasing the identity of the suspects is in the public's interest as they could help prevent similar incidents from happening in the future," the police said.
The police discovered a connection between the murder victim, Lee, Yoo and Hwang. Lee and the couple parked their money into the cyber coins and the victim was in charge of promoting a local cryptocurrency to investors. Lee is apparently known to have lost 80 million won ($61,068) after the investment turned sour.
The cryptocurrency in question, nicknamed the "fine-dust coin" at the time, allowed investors to mine the virtual coin by providing real-time air quality information on its website. The coin attracted investors, claiming they were cooperating with public institutions and large corporations.
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| Lee Kyeong-woo is taken to the Seoul Central District Court for interrogation before detention, Monday. Yonhap |
However, the price of the coin dropped sharply after it went public in November 2020. After peaking at 13,354 won, the coin's value plummeted to 17 won within six months by June 2021. The time frame matches Lee's testimony about his investment loss.
The cryptocurrency is also suspected of having been listed through secret payments. Last month, prosecutors arrested and charged a broker accused of secretly paying an official of a cryptocurrency exchange to list 29 different types of virtual cash, including fine-dust coins.
As of last year, one out of eight people had invested in virtual assets and the total amount of damage caused by crypto-related crimes over the past five years has reached 4.7 billion won.
Despite the urgency of the issue, the passage of bills aimed at protecting cryptocurrency investors has been stalled for almost two years. The National Assembly took a belated first step by forming a committee to review a related bill on March 28, although the proposed law was tabled in 2021.
"Unlike countries like the United States and Japan, Korea currently lacks regulations aimed at protecting cryptocurrency investors, despite the growing popularity of digital assets like Bitcoin and Ethereum and the increasing number of cryptocurrency-related fraud cases," said Rep. Lee Yong-woo of the main opposition Democratic Party, who tabled the bill.
"There is a pressing need for an institutional framework that can protect investors," he stressed.
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