South Korea’s Ministry of Justice will create a “Virtual Currency Tracking System” to crack down on money laundering facilitated by cryptocurrencies, and rated the establishment of the facility among its priorities for the year.
The Ministry last week announced its plans for 2023 with action against violent crime, sexual predators, and gang violence at the top of its list. Next came immigration reform.
In third place were a raft of measures aimed at addressing various unlawful actions such as tackling organized crime, repatriating accused criminals who abscond before facing local courts, improvements to criminal justice systems – and the aforementioned crypto-tracker.
South Korea has previously moved to ensure that crypto trading facilities available on its shores acquire licenses, and then cracked down on operators that didn’t observe its regulatory requirements. Those that did sign up were last year asked to report on transactions so the government could detect money laundering.
The nation is also home to Do Kwon, whose Terraform Labs imploded last year. That collapse set the snowball rolling for what’s become known as “crypto winter” as values of the tokens plunged and investor enthusiasm largely froze.
South Korea is of course next door to North Korea, which is known to use cryptocurrency to fund its weapons programs.
The roadmap called for crypto companies to observe the same regulations that other financial services players follow, and to inform consumers of the risks of their products.
The document also noted “poor cyber security across the industry that enabled the Democratic People’s Republic of Korea to steal over a billion dollars to fund its aggressive missile program.”
The administration has ordered its various agencies to increase enforcement and issue additional guidance to ensure compliance.
Another aim of the roadmap is to curb money laundering.
Few details were offered about the Virtual Currency Tracking System beyond hopes it will start to operate in 2023. Nor was it explained if the System will link to another of the Ministry’s priorities for 2023: improved forensic capabilities to detect and disrupt cyber crime.
Techies at the Ministry look set for a busy year. Other tasks on the to-do list include building a digital litigation system, plus new visa issuance systems. ®