South Korea’s Pro-Crypto Investor Policies Receive Boost Amid Crypto CEO’s Trial

The trial of Hugo Hyungsoo Lee, the CEO of Haru Invest, has brought widespread attention to the Korean government’s asset owner protection policies. Recall that in the middle of 2023, a law was passed by the government, which handed over regulatory authority to the Financial Services Commission (FSC), in a bid to ensure transparency in the country’s cryptocurrency industry and secure customer assets.

However, with the law known as the “Virtual Asset User Protection Act” being enacted this year, owners of virtual assets have been promised relief responses in the case of vendor-induced lapses. The regulations of the act see to it that the FSC monitors the activities of virtual asset providers to mitigate improper transactions.

These regulations include having vendors comply with insurance guidelines in the event of system crashes or cyberattacks, and keep records of transactions for a duration of at least fifteen years, among others.

With its enacting process being rolled out, the trial of Haru Invest’s CEO, Hugo Hyungsoo Lee, has placed more emphasis on the need for the Virtual Asset User Protection Act and why it has to be enforced quickly. Lee’s trial for an alleged $800 million fraud goes down as one of the biggest crypto fraud cases in Southeast Asia and no doubt has beamed a ray of attention on the recently enacted act.

Also, during the trial, the CEO of the cryptocurrency firm was stabbed by a 50-year-old man and taken to the hospital immediately for treatment. With crypto assets worth about 1 trillion involved in the embezzlement suit, the hopes of over 16,000 asset owners who obtained assets with Haru Invest between the third month of 2023 and the sixth month of 2024 sit on the fence between pessimism and optimism.

Obviously, there’s already a lot of bad blood towards the crypto firm, little wonder Lee was a victim of multiple stabs from a man believed to be affected by the fraud. This happened during Lee’s most recent trial hearing.

In the wake of this trial, it is expected that the operations of virtual asset service providers doing business in South Korea will be regulated by the FSC while protecting asset owners.

14 Arrested Over $12.8 Million Bitcoin Fraud

A set of 14 individuals who had been on the run for over a year over allegations of orchestrating cryptocurrency mining fraud up to the tune of $12.8 million (16 billion won) have been arrested. The main man behind the crime evaded arrest through his lawyer’s office manager, who during the period arranged for fake plastic surgery and a phone call.

According to the Financial Crimes Investigation Department of the Seoul Metropolitan Police Agency, the main man, who has been on the run for 10 months, is in his 40s with the surname Lee. He underwent plastic surgery purposely to evade arrest.

Lee and his conspirators organized a virtual Bitcoin mining scheme that caused 158 victims to lose their money between November 2021 and June 2022. During the process of perpetrating the crime, Lee stole 4.5 billion won ($3.6 million), which is a fraction of the 16 billion won illegally obtained from the victims.

Before the police took action, 21 lawsuits and reports had been received by the police across the country on the matter.

The police investigation report shows how Lee went to extra lengths to evade arrest. Throughout the period, Lee was supported by the office manager of the law firm he hired, who got him a plastic surgery clinic willing to assist and provided a fake phone that helped him evade arrest further.

In addition, 8 more arrests were made. Those arrested were said to be the recruiters involved in the fraud. They were apprehended during the course of the investigations.

A series of crypto scams are ongoing on the internet, with scammers hiding under fake identities to swindle people out of their investments. As ICOs are being clamped down on by financial investigators, many businesses are still being created under crypto mining to perpetrate fraud.