South Korea has long been a very important market for crypto exchanges and DeFi platforms.
FTX, for example, allegedly made the fortune of the so-called Kimchi PremiumThe gap in price between the cost of crypto in South Korea and elsewhere, largely fueled by the need for USD-backed trades, creates opportunities for arbitrage trading.
Adverse press attention
Although not illegal in itself, this method of revenue collection is generally frowned upon. Furthermore, South Korea has noticed the bad publicity drawn by crypto after the recent Bithum raids. It is worth noting that although Terraform Labs was not headquartered in Korea, the collapse of Terra also caused a major rift in local media outlets.
It is unclear whether the negative press generated over the past year or so had much to say in the Korean government’s decision to fund this tracking system.
However, according to a Report Released by local publication KHGames and outlined by Wu Blockchain, a crypto reporter working primarily on crypto developments in the APAC region, the Korean government has begun developing a system to track digital asset trades and plans to implement it sometime this year.
South Korea’s Ministry of Justice will implement a “cryptocurrency tracking system” in the first half of this year to strengthen the tracking of money laundering and the recovery of criminal proceeds using cryptocurrencies.
— Wu Blockchain (@WuBlockchain) January 29, 2023
End-to-end coverage of transactions
The virtual currency tracking system will reportedly monitor the transaction history of crypto users and trace the source of funds used in such transactions before sending them to the recipient.
A spokesman for the Ministry of Justice, the government agency reportedly leading the development effort, said the tool was necessary given the growing sophistication of methods used by cybercriminals.
“In response to the sophistication of crime, we will improve the forensic infrastructure. We will build a criminal justice system that meets international standards.”
The crypto tracking tool will act as a deterrent against cybercrime, increasing the amount of security crypto investors can gain in South Korea. Investors are already benefiting from an agreement reached by Korean police with five local big-league crypto exchanges to assist in fraud and theft related to digital assets.
Neither the exact capabilities of the upcoming tracking system have been announced nor an exact release date provided. However, further updates should be released by the Ministry of Justice soon, given plans to release the tool before the end of the year.
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