In light of the recent uptick in the practice of hiding illegal cash, South Korean authorities have taken a proactive approach similar to that of the US.
In light of the growing practice of hiding covertly acquired cash, South Korean authorities are reportedly planning to follow the lead of the US government in imposing stricter rules on crypto mixers.
Intergovernmental collaboration is essential because “mixers are an internationally shared issue,” as one FIU official put it.
Reports from the business community were referenced in a recent local article. The Financial Services Commission’s Financial Intelligence Unit (FIU) is cracking down on bitcoin mixers, as revealed in this report.
The paper emphasizes that crypto mixers are still unregulated, even though there is enough proof of their widespread use for illegal purposes.
A crypto mixer is a tool that can combine different users’ cryptocurrency. The goal is to make it difficult to trace where the money came from and who owns it. While some people may utilize crypto mixers with malicious intent, the vast majority do not.
According to Chainalysis, a lot of people choose mixers because they want or need privacy. These individuals may be residing in nations that repress certain social groupings or those who want to conduct legitimate business dealings incognito.
At the same time, information showed that in 2022, a mixer was used to launder about 10% of all cryptocurrency held by bad actors.
The article also mentions a hacking incident that made use of the blockchain platform Ozys’ Orbit Bridge, which a South Korean company created. As a consequence, 81 million dollars’ worth of cryptocurrency was lost.
A professor at Dongguk University’s Graduate School of Information Protection named Hwang Seok-jin says that hackers use crypto mixers to turn their cryptocurrency holdings into cash.
“Virtual asset exchanges are a good place to start blocking mixer transactions if we want to achieve this goal.”
But it does show that rules for crypto mixers will take a long time to adopt. International collaboration is crucial in the crypto space because of the cross-border complexity of the industry.
The US government claimed in September 2023 that Tornado Cash had helped the North Korean hacker organization Lazarus launder around $500 million. The co-founder of Tornado Cash, Roman Storm, entered a not guilty plea, saying, “The government was mistaken in this case.”
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