South Korea to Track Crypto Transactions in 2023 to CrackDown on Money Laundering
The South Korean regulators have decided to initiate further steps by implementing a crypto-tracking system in order to counter money-laundering initiatives as well as recover funds linked to criminal activities.
The South Korea’s Ministry of Justice will lead this initiative using third-party software to monitor transaction history, extract the information on transactions, as well check the source of funds. As per reports, the cryptocurrency tracking system will be implemented in the first half of 2023. Besides, it also plans to implement its own tracking system during the second-half of the year.
A rough translation of the Ministry’s statement reads: “In response to the sophistication of crime, we will improve the forensic infrastructure (infrastructure). We will build a criminal justice system that meets international standards (global standards)”.
Last year in October 2022, the South Korean police signed an agreement with domestic crypto exchanges Bithumb, Upbit, Corbit, Coinone, and Gopax. All these exchanges have pledged cooperation in criminal investigations that involves digital assets. Crypto exchange Bithumb has already been under investigation for price manipulation or tax evasion.
South Korean lawmakers are currently considering 17 separate proposals to regulate cryptocurrencies using which they will formulate the Digital Asset Basic Act.
In recent development, the South Korea Supreme Court ruled that the crypto exchange Bithumb should pay damages to investors for the 1.5-hour service outage back in November 2017. For the 132 investors involved, the Supreme Court ordered damages ranging from as little as $6 to around $6,400 during the finalized ruling.
The court noted: “The burden or the cost of technological failures should be shouldered by the service operator, not [the] service users who pay commission for the service”.
The 300 members of South Korea’s National Assembly have been currently debating several crypto proposals ranging from implementing the reserve requirements at exchanges and creating better protection and rules for local citizens.
Under the Digital Asset Basic Act (DABA), the lawmakers will build a comprehensive legal framework offering regulatory guidelines for the Korean crypto industry.
Over the last year, some major downfalls in South Korea’s crypto landscape has got its regulators on their toes. This includes the collapse of the Terra ecosystem that wiped out $40 billion of investors’ wealth.