South Korean Police Unravel Major Cryptocurrency Laundering Operation
The South Korean police have successfully unraveled a significant cryptocurrency laundering operation linked to a fraudulent scheme based in Cambodia, which funneled 16.8 billion won (approximately $11.1 million) through Tether (USDT) transactions and various exchanges. The investigation, conducted by the criminal investigative division of the Seoul Metropolitan Police Agency, resulted in 23 individuals being referred to prosecutors, facing charges for breaching the Foreign Exchange Transactions Act and the Act on Reporting and Using Specified Financial Transaction Information.
Details of the Operation
Among the 23 suspects, two primary accused, referred to only as A and B, have been apprehended and are currently in detention. The operation was reportedly orchestrated by a person known as C, who directed members of the group to handle money generated from the phishing syndicate’s activities, which includes acquiring USDT, relaying funds between cryptocurrency platforms, and executing unlawful foreign exchange transactions from February 2024 to April 2025.
Authorities discovered 265 cases of voice phishing and investment scams associated with over 11,300 accounts involved in this laundering network, which collectively racked up losses of roughly 25.7 billion won (around $17 million). The accounts were utilized to conceal and transfer illicit funds before they were integrated into the legitimate financial system.
Seizures and Ongoing Investigations
Additionally, the police have secured pre-indictment seizure orders for approximately 650 million won (around $430,000) identified as criminal proceeds from this scheme. Meanwhile, the alleged mastermind remains at large, being sought under an Interpol Red Notice as law enforcement continues to pursue his capture.
Further Arrests and Warnings
A separate angle of the investigation has also led to 33 further arrests involving individuals accused of running illicit currency exchanges that utilized cryptocurrencies. These suspects reportedly charged commissions from foreign tourists and others, acquiring USDT and subsequently transferring it between various exchanges for conversion into foreign currency or Korean won, amounting to around 6.3 billion won (approximately $4.2 million).
A police representative cautioned the public that facilitating cryptocurrency transactions on behalf of others or converting digital assets to fiat currency for third parties can violate South Korean law. This crackdown comes as South Korean authorities intensify measures against financial crimes associated with cryptocurrency.
Collaboration and Future Measures
Just recently, blockchain analytics company Chainalysis formed a partnership with the Korean National Police Agency for training investigators in virtual asset crimes, including fraud and money laundering. Enforcement activities encompass a dedicated task force focusing on cryptocurrency-based money laundering, specifically targeting unregulated exchanges and financial transactions conducted with stablecoins like USDT.
Additionally, law enforcement agencies have broadened their scrutiny beyond criminal organizations, with recent searches conducted at the offices of Bithumb, a cryptocurrency exchange, in relation to allegations implicating lawmaker Kim Byung-gi regarding the use of his political influence for preferential hiring in the cryptocurrency sector.
