South Korean Prosecutors Buy Blockchain Analytics Tool to Interrupt ‘Crypto Money Laundering’

South Korean Prosecutors Buy Blockchain Analytics Tool to Interrupt ‘Crypto Money Laundering’

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South Korean Prosecutors Buy Blockchain Analytics Tool to Interrupt ‘Crypto Money Laundering’
Source: sezerozger/Adobe

South Korea’s prosecutors want to buy new blockchain analysis software – and want to use it to catch people laundering crypto abroad.

According to the domestic media Economist, the new tools will be used to apply the same level of scrutiny to foreign stock exchanges as is currently applied to domestic stock exchanges.

The project is the idea of ​​the Supreme Prosecutor’s Office.

The office has opened a tender process for the project.

It has named the project “Advanced Cyber ​​​​Investigation System” (literal translation).

The tender process ends this month, and the winning contractor has until November this year to deliver the new tools.

A chart showing one-week transaction volumes on the South Korean market-leading crypto exchange Upbit.
One week’s transaction volumes on the South Korean market-leading crypto exchange Upbit. (Source: CoinGecko)

How do South Korean prosecutors hope to catch ‘crypto money launderers?’

Police and the judiciary have been given extensive powers to investigate crypto transaction data on domestic exchanges.

Trading data is completely anonymized by a law that requires all citizens using crypto exchanges to link their wallets to real name-verified bank accounts.

The police and judiciary have also been given the power to force exchanges to freeze wallets.

They are also allowed to search stock exchanges as part of the investigation.

But many criminals, police believe, try to evade investigators by using foreign crypto exchange platforms.

The chief prosecutor’s office hopes its new tool will help change this.

Law enforcement and court personnel have been using a monitoring tool that was first deployed in prosecutors’ offices across the country in April 2021.

But it says this tool currently cannot “identify virtual currency addresses generated by foreign currencies.”

The office claimed that the new software will be able to close this gap.

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It also claimed the tool would allow it to “track and delete illegally filmed videos” and “crack down on pornographic websites.”

And the office claimed it would be able to track illegal websites “even if they periodically change website addresses to avoid blocking.”

A chart showing Bitcoin prices against the South Korean Won over the past month.
Bitcoin Prices vs South Korean Won in the Last Month. (Source: XE.com)

Law enforcement and judicial spending on blockchain analytics tools is on the rise in South Korea.

Late last year, police and prosecutors announced they would quadruple their spending on tools that help them monitor crypto transactions.

In addition to anti-money laundering operations, law enforcement and prosecutors are currently waging what the president has called a “war” against crypto-fueled drug trafficking.

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