Activation of the “Virtual Asset Custody System Platform for Seized Assets”! 6.8 Million USDT Transferred
In recent years, there have been frequent incidents of money laundering and fraud involving cryptocurrencies, and regulatory authorities have become increasingly concerned. In order to improve the efficiency and security of seizing virtual assets and completely deprive criminals of their ill-gotten gains, the New Taipei District Prosecutors Office announced in a press release yesterday (April 15th) that the “Virtual Asset Custody System Platform for Seized Assets” developed by the Ministry of Justice has officially been launched.
Following the activation, the New Taipei District Prosecutors Office has transferred all 6,798,270 USDT stablecoins (equivalent to approximately 239.4 million New Taiwan Dollars) that were previously seized and stored in a cold wallet to the platform. This marks the first use of a virtual asset account by a district prosecutor’s office.
What are the challenges behind the Ministry of Justice’s platform for storing large amounts of stablecoins?
In recent years, the New Taipei District Prosecutors Office has investigated a number of cases involving activities such as underground currency exchange by the “88 Club” and a multinational gambling group, as well as money laundering by fraudulent groups using personal currency exchanges. As a result, a large amount of cryptocurrency has been seized.
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In November 2022, the New Taipei District Prosecutors Office investigated an underground currency exchange group, in which the head of the “88 Club,” Guo Zemin, was suspected of multiple illegal activities. Cash amounting to 44.12 million NTD and 641,2959 USDT (approximately 206 million NTD) were seized.
However, the storage of these large amounts of stablecoins has become a considerable challenge. The New Taipei District Prosecutors Office was concerned about the possibility of hackers infiltrating and stealing from the cold wallet or causing damage, so they hesitated to submit the confiscated assets to the treasury. The large amount of cryptocurrency seized by the police could only be temporarily stored in a cold wallet prepared by the New Taipei District Prosecutors Office, with the password, mnemonic phrase, and physical cold wallet being kept by different individuals.
Not only is this storage process cumbersome, but it also places a significant psychological burden on the custodians. The New Taipei District Prosecutors Office also stated that storing cryptocurrency proceeds in a cold wallet is prone to risks such as losing private keys and the risk of being held solely by one person. Therefore, the treasury often refuses to accept them to avoid taking responsibility.
The “Virtual Asset Custody System Platform for Seized Assets” developed by the Ministry of Justice can effectively solve the storage issues that arise after cryptocurrency seizures in the future.
The platform is designed to unify practices nationwide, allowing judicial police agencies to directly transfer seized cryptocurrencies to the virtual asset accounts of specific prosecutor’s offices through the platform, which will be securely managed by the system. This will prevent issues such as human negligence in storage or embezzlement, and also integrate with the case management systems of prosecutor’s offices to simplify the operation process.
In recent years, illegal fundraising and fraud cases have been rampant, and virtual currencies have become the main method of money laundering. The New Taipei District Prosecutors Office stated that they will investigate these cases strictly and promptly, actively tracing and seizing criminal proceeds. At the same time, the New Taipei Prosecutors Office once again urges the public to be aware of the risks and traps when investing in order to avoid becoming victims.
Proofread and edited by: Gao Jingyuan