"Domestic Investigative Agencies Deepen Dependence on U.S. Virtual Asset Analysis Tools… Spending Billions of Won Annually"

As crimes abusing virtual assets (cryptocurrencies) surge, domestic investigative agencies have been shown to spend billions of won annually on analysis programs provided by U.S. companies. Concerns over security and data sovereignty are also being raised because investigative secrets are processed on overseas systems.

According to materials released on the 9th by the office of Kim Tae-ho of the People Power Party, the National Police Agency spent approximately 4,814,000,000 won this year on software from Chainalysis. Of that, the cyber and digital investigation departments spent 3,690,000,000 won, criminal and narcotics investigations spent 954,000,000 won, and security investigations spent 170,000,000 won.

Chainalysis is a program that tracks the transaction flows of virtual asset wallet addresses to identify wallets linked to crime and major exchanges. It is also connected to the U.S. Treasury Department's sanctions system and is reported to require subscription fees of hundreds of millions of won per account per year.

Police spending has surged recently. It recorded 2,949,000,000 won in 2023 and 3,699,000,000 won in 2024, and this year reached the 4.8 billion won range. It represents a 63% increase over two years.

The prosecution is also highly dependent. According to the Ministry of Justice, the prosecution spent approximately 1,348,000,000 won this year on Chainalysis. That is about a fourfold increase compared to 378,000,000 won in 2022. The prosecution has expressed intent to develop its own program, but results are reportedly still limited.

The situation is similar for financial authorities. Since the enforcement of the User Protection Act this year, the Financial Services Commission introduced Chainalysis for unfair trading investigations and spent 150,000,000 won. The Financial Supervisory Service also spent 170,000,000 won each last year and this year.

Kim Tae-ho emphasized, "It has been a long time since the Supreme Prosecutors' Office and other investigative agencies announced plans to pursue development of their own tracking programs, but there has been no progress yet," adding, "The structure of relying on overseas technology for national investigative infrastructure must be resolved."