Blockchain technology is often criticized for helping criminals move money. However, the same permanent transaction records are increasingly helping authorities trace suspicious funds and identify those responsible.
This shift is particularly visible in South Korea, where prosecutors are using digital trails to strengthen investigations and preserve evidence. According to local media reports, the Ministry of Justice said prosecutors booked 304 people in financial, securities, and virtual-asset cases between June 2025 and May 2026.
Of those suspects, 25 were detained. In addition, authorities secured preservation orders covering 381.4 billion won in suspected criminal proceeds. As a result, defendants cannot transfer or dispose of the targeted property before the courts issue final rulings.
Blockchain Records Give Prosecutors a Searchable Money Trail
The total covers several crime categories. Nevertheless, officials did not specify how many suspects faced virtual-asset allegations or the preserved digital-asset value. Still, South Korea’s system shows how blockchain records support investigations.
Initially, Seoul prosecutors created a Virtual Asset Crime Joint Investigation Department in February 2025. That department replaced a temporary unit formed in 2023. The original team included 30 investigators from seven agencies, including prosecutors, regulators, tax officials, and customs authorities.
This structure combines legal powers with technical analysis. As a result, investigators can collect blockchain transactions, examine smart-contract activity, and review token documents to determine whether projects operated as advertised.
Unlike cash, blockchain networks preserve searchable transaction histories. Wallet addresses show where funds moved, when transfers occurred, and which routes connected them.
However, wallet addresses do not identify people. Therefore, investigators need regulated exchanges to connect transfers with verified customers and account activity.
Exchange Data Links Anonymous Wallets to Verified Identities
South Korea’s travel rule has strengthened that connection since March 2022. Under the requirement, virtual-asset service providers must transmit sender and recipient information for qualifying transfers worth at least 1 million won.
Consequently, when suspicious funds reach a compliant exchange, prosecutors can compare blockchain records with customer identities, transaction logs, and account histories. This process helps convert seemingly anonymous wallet movements into evidence linked to identifiable individuals.
Moreover, enforcement efforts can begin before stolen assets disappear through additional transactions. In June, the National Police Agency partnered with Upbit, Bithumb, Coinone, Korbit, and Gopax to share intelligence related to phishing cases.
Using that information, exchanges can strengthen fraud-detection systems and restrict accounts suspected of laundering victims’ funds. Nevertheless, criminals can complicate investigations by using mixers, cross-chain bridges, decentralized exchanges, privacy tools, and overseas platforms.
Even so, blockchain analytics, exchange records, and cooperation between agencies provide investigators with a detailed transaction map. South Korea’s enforcement figures, therefore, show how crypto’s permanent trail is becoming an increasingly valuable prosecutorial advantage.
Related: South Korea Restarts Digital Asset Law Discussions With Year-End Target
