FIU Seeks Chainalysis Tool to Strengthen On-Chain Tracking of Crypto Crime Proceeds

South Korea’s Financial Intelligence Unit is moving to build a system capable of tracing criminal proceeds, including from voice-phishing scams, after they are converted into virtual assets and transferred to overseas exchanges or personal wallets.

The FIU, which operates under the Financial Services Commission, is seeking to adopt an on-chain data solution from blockchain analytics firm Chainalysis, Seoul Shinmun reported on September 21. To support the project, the Financial Services Commission reported to the National Assembly that it plans to set aside 1.93 billion won ($1.4 million) in related budget funding.

On-chain data refers to transaction and asset-transfer information recorded on a blockchain. While the transaction history itself is public, it displays complex wallet addresses instead of users’ real names, limiting the ability to identify the actual owner of the funds and trace their route.

The system the FIU is pursuing is aimed at linking and analyzing fund transfers between domestic and overseas virtual-asset exchanges and electronic wallets, with a focus on identifying transaction flows that may be tied to crime.

For example, authorities would be able to trace movements on the blockchain even if proceeds from a voice-phishing scam are converted into virtual assets, sent from a domestic exchange to an overseas exchange, and then moved to a personal wallet.

The number of FIU reviews and analyses of suspicious money-laundering transactions has also been rising. The total increased to 33,834 in 2024 from 26,692 in 2023, and reached 44,680 last year.