Government Announces System to Track Crypto Transactions

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A new crypto tracking system will be introduced to the South Korean crypto industry to combat illegal crypto transactions and money laundering. 75% of illegal exchange transactions are crypto-related in South Korea.

The first half of this year will see the launch of a “virtual asset tracking system”, according to South Korea’s Justice Ministry. By using cryptocurrency, South Korea wants to make it easier to detect money laundering and recover money.

In recent years, South Korea has emerged as one of the top markets for cryptocurrencies. The number of crimes involving cryptocurrencies is also increasing. Due to increased usage and crypto crime, there are now more rules and government control over the industry in the country. Especially following the Terra-LUNA crisis.

According to government statistics, cryptocurrency plays a role in 75% of illegal foreign exchange transactions in the country.

In order to trace transactions related to money laundering and proceeds of crime, the Ministry of Justice will deploy a “crypto tracking system”. This will be done in the first half of this year.

The ministry will use the tracking system to review and track transaction records. It will also collect information on how transactions are linked and verify the origin of funds before and after transfers. They are also working on a strategy to create a South Korean crypto tracking and analysis system at the same time.

The “National Digital Forensic Cloud System” will also be implemented by the Ministry of Justice in the first half of this year. To facilitate use by other agencies, the forensic cloud system will be based on the Digital Forensic System (D-Net).

Five prominent Korean cryptocurrency exchanges and the National Police Agency’s Cyber ​​Investigation Bureau entered into a deal last year. This provides a secure trading environment and stops unauthorized use of virtual assets.

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A network of “digital asset coordinators” has also been developed by the US Department of Justice to monitor crimes involving cryptocurrencies. The White House unveiled the digital asset regulatory framework in September last year. It included the creation of the Network of “Digital Asset Coordinators”.

75% of illegal exchange transactions are crypto-related in South Korea

Bloomberg reported mid-last year that illegal foreign exchange trading in South Korea was dominated by transactions involving cryptocurrencies. According to data from the South Korean authorities, the majority was 75%.

In 2022, South Korea’s prosecutor’s office investigated four crypto-related cases involving over $1.1 billion in unauthorized transactions.

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Cryptocurrencies are involved in about 75% of transactions that violate South Korea’s foreign exchange laws. From around $800 million in 2021 to billions in 2022, illegal foreign exchange transactions have doubled. Compared to 2021, illegal crypto-related transactions increased by 61% in 2022.

The staggering data and its effects on the South Korean economy explain their recent decision. The Department of Justice has pledged to do everything possible to curb illegal crypto transactions this year.

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