What to Know:
- South Korea has exposed a cross-border crypto-linked operation that moved over 150 billion won through illegal foreign exchange schemes.
- About 83% of the illicit transactions involved digital assets, with criminals disguising transfers as tuition fees and medical expenses to bypass monitoring systems.
- The case comes amid intensified inspections targeting underground forex networks, as South Korea faces rising gaps in trade flows and a fast-growing domestic crypto market.
South Korea’s customs officials discovered a money laundering ring from abroad that they say is laundering over 150 billion won (roughly $101.7 million). The money laundering was facilitated by crypto-linked foreign exchange schemes operating outside the country’s regulatory laws.
South Korea: $100 Million Cross-Border Crypto Laundering Ring Caught
The Korea Customs Service said on Monday that three Chinese nationals have been referred to prosecutors for alleged violations of the Foreign Exchange Transactions Act. Investigators believe the group laundered approx 148.9 billion won between September 2021 and June last year.
The crime was facilitated by loopholes between domestic banking systems and overseas crypto platforms. The suspects used a complex setup including crypto wallets located in multiple jurisdictions as well as South Korean bank accounts opened under false or misleading pretenses, the agency said.
As per reports, authorities said the transactions were disguised as routine payments. Some were labeled as cosmetic surgery expenses for foreign nationals. Others were presented as overseas tuition fees or study-related costs for students. On paper, the transfers appeared ordinary. In practice, they masked large-scale illegal capital movements.
Investigators said the group tried to avoid monitoring by buying cryptocurrency abroad, transferring the assets into digital wallets based in South Korea, and converting the money into Korean won. The cash was later shared among numerous domestic bank accounts, complicating identification, the authorities added.
Customs officials said the scheme was highly coordinated and carefully arranged to take advantage of the speed and opacity of crypto transactions. The case is part of a wider push by South Korea to clamp down on illegal foreign exchange activities.
On January 13, the Korea Customs Service announced year-round intensive inspections of underground money exchange operations to undermine currency stability and weaken oversight of cross-border flows. The impetus for the crackdown has increased in recent years.
In 2025, the discrepancy between proceeds of trade processed by banks and the value of goods reported to customs stood at almost $290 billion, according to customs data released last week. It was the largest gap in five years and also an indication of the flow of hidden capital. In another investigation in 2025, 97% of companies it surveyed were conducting illegal foreign exchange transactions, based on a separate inspection. The amount of violations totaled 2.2 trillion won.
The latest enforcement action has also drawn renewed attention to South Korea’s rapidly expanding cryptocurrency market. Data from the Financial Services Commission shows that the country’s digital asset market capitalization stood at 95 trillion won, or about $64.6 billion, as of June 2025. Average daily trading volume reached $4.35 billion.
Investigators noted that cryptocurrency played a dominant role in the laundering operation. Roughly 83 percent of the identified transactions were conducted using digital assets.
In a previous incident, authorities previously dismantled another criminal group that used stablecoins, particularly USDT issued by Tether, to illegally transfer 920 billion won. Stablecoins have emerged as a preferred tool for such activity due to their price stability and ease of cross-border movement.
Officials said these assets allow large sums to move quickly while avoiding the volatility typically associated with cryptocurrencies such as bitcoin. Combined with the decentralized structure of blockchain networks, tracing transactions across borders remains resource-intensive and time-consuming for regulators.
Korea Customs Service data shows that nearly 90 percent of the $7.1 billion in crypto-related crimes referred to prosecutors between 2021 and August 2025 involved similar laundering schemes.
South Korea’s experience mirrors a wider global pattern. According to blockchain analytics firm Chainalysis, more than $2.17 billion was stolen from crypto services during the first half of 2025 alone, which is beyond the total losses recorded across all of 2024.
Globally, illicit crypto activity has expanded beyond isolated cyber thefts. Estimated illegal cryptocurrency volumes reached $51 billion in 2024, with money laundering accounting for a substantial share. Ransomware payments hit a record $602 million in 2025, with most transactions conducted through digital assets.
Researchers estimate that between $800 billion and $2 trillion is laundered worldwide each year, equivalent to 2 to 5 percent of global GDP. Despite increasing enforcement, only around 1 percent of illicit financial flows are detected and seized.
Also Read: South Korea: Cops Accused of Aiding $1.86B Crypto Laundering Network
