Digital Asset reported that a proposal has been made stating that the Financial Intelligence Unit (FIU) of the Financial Services Commission should be able to early freeze assets held in domestic exchanges for up to 6 months when criminal proceeds are converted into virtual assets (digital assets). Kim Byung-jin, a prosecutor at the Seoul Central District Prosecutors' Office, proposed a plan to establish an FIU-led early freezing system for digital assets within the Specific Financial Transaction Information Act, in his paper 'Conversion of Criminal Proceeds into Digital Assets and Introduction of an Early Freezing System' published in the Supreme Prosecutors' Office academic journal 'New Trends in Criminal Law'. The method proposed by the paper is a structure of 'investigative agency request → FIU review → virtual asset service provider freezing'. When an investigative agency requests freezing based on specific cases and data, the FIU separately reviews whether there is a substantial reason to believe that the digital asset is related to illegal property, such as criminal proceeds, and whether it is necessary to freeze it to prevent transfer or concealment. If the FIU approves the requirements, it will demand domestic virtual asset service providers to restrict the withdrawal, transfer, or disposal of the asset.
