South Korea’s Ministry of Justice to enforce crypto tracking system in H1 2023

The Ministry of Justice in South Korea, through a Government Business Report released on Jan. 26, announced the primer of a ‘virtual currency tracking system’ to curb money laundering and recovery of proceeds of crime.

Enforcement of the ‘virtual currency tracking system’

The ‘virtual currency tracking system’ will enhance the monitoring of digital transactions, retrieve necessary information and confirm the sources before completing the transactions, according to a local news outlet. 

In addition, the ministry said they were overhauling the entire scientific investigation platform and upgrading it to combat increasingly sophisticated crimes.

The first half of the year will see a proper reorganization of the current forensic investigation infrastructure. The immediate priority is building a cloud system to hold forensic data. This will enable other related agencies to utilize the available digital forensic system (D-Net) when prosecuting cases.

Agreement with virtual currency exchanges

In October 2022, the South Korean police signed an agreement with the top five local cryptocurrency exchanges to curb crimes related to crypto assets. The deal provides a cordial relationship with the investigators allowing for a smooth flow of information to eliminate digital assets crimes. The National Police Agency, through the Cyber Investigation Bureau, applauded the move, saying it was a show of commitment to eliminating illicit exploitation of virtual assets and safeguarding customers’ interests.

The National Police Agency utilizes the professional investigator system to strengthen its capabilities to tackle investigations in virtual currency. Crypto experts are digging into the dark web to unravel the use of virtual currencies in drug trafficking and other crimes.

Strengthening the watchdog

South Korea’s agencies have been working to strengthen the virtual currency platform through regulations. In November 2022, South Korea’s Ministry of ICT set a raft of ethical guidelines to combat crime in the metaverse.

Recently, the South Korean authorities charged V Global’s top executives with defrauding investors. The executives had instructed new customers to deposit 6m Korean Won into their accounts and earn 18m, equivalent to a 300% return on investment. The customers later said the company defrauded them, forcing authorities to intervene in what ended up being the arrest and imprisonment of V Global’s executives.

Mr. Lee, the CEO of V Global, was sentenced to 22 years in prison for being the scheme’s mastermind.