Some features of cryptocurrency make it the best tool for money laundering, and authorities worldwide are working to curb the problem. Recently the Ministry of Justice in South Korea announced its plans to instigate a crypto-tracking system to recover funds linked to criminal activities and counter money laundering.
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
The system is supposed to bird-dog transaction history; it will then extract the information related to dubious transactions and check the source of the funds before and after remittance, according to the local media.
Although the system is scheduled to be deployed in the first half of 2023, the South Korean ministry plans to develop an independent tracking and analysis system in the latter half of 2023.
The ministry issued a statement that crime has recently become more sophisticated and planned than ever; now, to counter the crimes, they must also improve the forensic infrastructure by building a criminal justice system compatible with international standards.
South Korean police are already in agreement with five crypto exchanges in the country for their cooperation in criminal investigations, with the ultimate goal of creating a safe trading environment for crypto investors.
The country’s Supreme Court ruled that Bithumb, the crypto exchange, will have to pay the damages to the investors for 1.5 hours of service outage on November 12, 2017. The ruling finalized the supreme court’s order where damages ranging from $6 to $6,400 must be paid to 132 investors. Stating that “The burden or the cost of technological failures should be shouldered by the service operators, not service users who pay commission for the service.”
Although it’s quite early to say that this system will curb money laundering, it is a step forward nonetheless. It is a very serious offense, and people doing this would use any means to launder the ill-gained money. Let us consider that if the system works as promised and can catch the financial criminals, South Korea would be among the pioneers in creating the technique.
The main reason behind money laundering is to evade taxes; before crypto, many other means were used, but those proved rudimentary; crypto’s anonymity allowed better evasion, and money laundered is also used in terror funding, drug trafficking, human trafficking, smuggling and what not. If this tracking system works, it could be a big blow for criminals.
Such innovations are always welcome, as they provide an environment for the betterment of the financial ecosystem of a country, along with sealing the loopholes used by criminals to leak out money for their benefit. The money can be used not only for the betterment of the country. But also strengthening its position in the world.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/01/30/crypto-tracking-software-to-be-adopted-by-south-korea-in-2023s-first-half/