South Korea’s Supreme Prosecutor’s Office is set to purchase new blockchain analytics software to aid in the fight against money laundering through cryptocurrencies. The software will be used to scrutinize overseas exchanges with the same level of scrutiny as domestic exchanges to catch and prevent laundering.
New Tools for Cyber Investigations
The Supreme Prosecutor’s Office has initiated a bidding process for the project, which is named the “Advanced Cyber Investigation System.” The bidding process will close this month, and the winning contractor will have until November to deliver the new tools.
The police and judiciary in South Korea have already been given extensive powers to examine crypto transaction data at domestic exchanges. A law requires citizens using crypto exchanges to link their wallets with real name-verified bank accounts, thereby de-anonymizing trading data. The police and judiciary can also force exchanges to freeze wallets and search exchanges as part of their investigations.
However, many criminals are evading investigators by using overseas crypto exchange platforms. The Supreme Prosecutor’s Office hopes that the new software will help change this.
The Gap to Be Plugged
Law enforcement officials and judiciary staff have been employing a monitoring tool since April 2021, which cannot “identify virtual currency addresses generated by foreign exchanges.” The office claims that the new software will be able to plug this gap.
The new software will also “track and delete illegally filmed videos” and “crack down on pornographic sites,” according to the office. Additionally, it will be able to track illegal sites “even if they periodically change site addresses to evade blocking efforts.”
Increasing Spending on Blockchain Analytics Tools
The spending on blockchain analytics tools by law enforcement and the judiciary in South Korea is on the rise. Police and prosecutors announced last year that they would quadruple their spending on tools to monitor crypto transactions.
Apart from anti-money laundering efforts, police and prosecution officials are currently fighting against crypto-powered drug trafficking, which the President has referred to as a “war.”
The South Korean government has been actively working to regulate the crypto industry in the country. The government recently announced plans to impose a 20% tax on crypto trading profits exceeding KRW 2.5 million ($2,200) to prevent tax evasion. With the new blockchain analytics software, the government hopes to further increase its oversight and control over crypto transactions to prevent money laundering and other illegal activities.
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