In response to the rising trend of concealing funds obtained through illicit means, South Korean authorities are reportedly set to emulate the United States government’s approach in tightening regulations on cryptocurrency mixers.
“Mixers are an internationally shared issue, so cooperation between countries is necessary,” an FIU official stated.
South Korea Sees Regular Use of Crypto Mixers, With No Oversight
The recent local report cited industry sources. It reveals that the Financial Intelligence Unit (FIU) of the Financial Services Commission is clamping down on cryptocurrency mixers.
The report highlights the absence of regulations on crypto mixers at the present time, despite clear evidence of their frequent use for illicit activities.
A crypto mixer performs the function of blending cryptocurrencies from various users. This is with the intention of obscuring the origins and ownership of the funds.
Read more: Coinomize Review 2023: Is This the Right Coin Mixer for You?
However, not all users who use crypto mixers are doing so for illicit purposes.
According to Chainalysis, many individuals opt for mixers either due to a preference for privacy or a genuine need for it. These could be those living in countries that oppress specific groups of society or those seeking to engage in legal transactions anonymously.
Meanwhile, data revealed that almost 10% of all crypto under malicious entities were laundered through a mixer in 2022.
South Korea Will Clamp Down on Crypto Mixers
Meanwhile, the report cites a hacking incident exploiting South Korean blockchain company Ozys’ Orbit Bridge. This resulted in the loss of $81 million worth of crypto.
However, Hwang Seok-jin, a professor at Dongguk University’s Graduate School of Information Protection explains that for hackers to eventually get value from their crypto, they must convert to cash, and they do this through crypto mixers.
“To do this, transactions using mixers need to be blocked at the source, likely starting from virtual asset exchanges.”
However, it indicates that the implementation of regulations for crypto mixers will be time-consuming. Due to crypto’s cross-border complexities, international cooperation is essential.
In September 2023, the US government alleged that Tornado Cash had enabled North Korean hacking group Lazarus to launder nearly half a billion dollars. However, Roman Storm, the co-founder of Tornado Cash, pleaded not guilty, stating:
“The government got it wrong here.”
Read more: Crypto.com vs. Coinbase: Which Crypto Exchange Is Right for You?
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
