South Korea Tax Agency Picks Bonanza Factory for Crypto Tax-Evasion Tracking System

South Korea’s National Tax Service will introduce specialized transaction-tracking software to curb tax evasion involving virtual assets.

Bloomingbit reported on May 22 that the agency selected Bonanza Factory as the final contractor for its “virtual asset tax-evasion response transaction-tracking software” project.

Bonanza Factory, founded in 2017, is a digital-asset compliance company. It has mainly supplied KYT, or Know Your Transaction, systems that detect unusual blockchain wallet transactions and money-laundering risks in real time.

The system will let the National Tax Service use data to visualize the movement of major virtual assets including Bitcoin and Ethereum. Core functions include clustering to identify links among dispersed wallet addresses and tools to track non-custodial wallets managed directly by individuals. The data collected will serve as base material for investigations into asset concealment by delinquent taxpayers, improper inheritance and gift transfers, and offshore tax evasion.

The software will also support a demixing function to trace mixer techniques used for money laundering. Mixers combine virtual assets from multiple users to erase the original transfer record and are often used to hide proceeds from dark-web transactions and ransomware. The demixing solution works backward with algorithms based on transaction timing, inflow and outflow amounts, and fund-splitting patterns, allowing investigators to narrow the final destination of laundered funds to a specific exchange or wallet cluster.