The South Korean Ministry of Justice disclosed intentions to create a crypto tracking system to combat the flow of dirty money and other related financial transactions and to reclaim cash associated with criminal conduct.
Recently, the country’s Financial Supervisory Services Governor Lee Bok-hyun stated the government’s plan to establish a digital currency monitoring tool to secure data and counteract market dangers.
It is believed that 2 million South Koreans, or approximately 4% of the population, presently possess cryptocurrencies. According to government data, bitcoin and other related currencies are involved in one-third of unlawful foreign exchange transactions in the country.
Image: Sungjin Kim/Getty Images
South Korea As Crypto Powerhouse
In the 12 years following the creation of Bitcoin, Asia has emerged as a digital currency and blockchain dynamo, with South Korea serving as its pivot.
The country’s main telecom provider, SK Telecom, is introducing a web3 wallet, while the country’s largest financial technology company, Dunamu, aims to roll out $380 million over the next five years to generate 10,000 new web3 employment opportunities.
The South Korean Ministry of Justice will introduce a “cryptocurrency tracking system” in the first half of this year to strengthen the tracking of money laundering and recovery of criminal proceeds using cryptocurrencies. https://t.co/2CLkaLUrX6
— Wu Blockchain (@WuBlockchain) January 29, 2023
Following the Terra-LUNA crisis, the government has expanded its control and laws around cryptocurrencies as the number of people using them rises.
Khgames, a local media site, said that the virtual currency monitoring system will be used to monitor transaction history, extract data about transactions, and verify the source of cash before and during the transmission.
Roughly translated, the ministry’s statement reads as follows:
“In response to the sophistication of crime, we will improve the forensic infrastructure. We will build a criminal justice system that meets international standards.”
Following the successful launch of the proposed tracking system, the Ministry of Justice declared that it would put in place a second tracking and analysis system by the second half of 2023. The deployment of the first system is scheduled for the first half of this year.
Next Project: National Digital Forensic Cloud System
Up to 30% of global cryptocurrency trading is fuelled by the Korean market. As the government has not yet designated crypto assets as legal cash, it is now permissible to hold, sell, and purchase cryptocurrencies in the country.
Crypto total market cap at $1 trillion on the daily chart | Chart: TradingView.com
Leading entities such as Solana are conscious of the country’s attributes not only as customers but also as developers inside its crypto business. The Solana Foundation and Solana Ventures have recently committed $100 million to invest in web3 startups in South Korea.
During the first half of this year, the Ministry of Justice also wants to build the “National Digital Forensic Cloud System.” The forensic cloud system will be designed after the digital forensic system (D-Net) so that other agencies can utilize it.
Previously, the South Korean authorities forged an agreement with five local exchanges to collaborate in criminal investigations, with the ultimate goal of establishing a secure trading environment for crypto investors.
Featured image from UK Research and Innovation