South Korea dismantles an international cryptocurrency laundering network valued at $107 million

Customs authorities in South Korea have referred three Chinese citizens to the courts for orchestrating a massive money laundering scheme through cryptocurrencies. The illicit operations moved approximately 148.9 billion won (equivalent to $107 million), according to reports released this week by local officials.

The Money Laundering Machinery: How the Criminal Network Operated from South Korea

The group allegedly operated between September 2021 and June 2025, using a sophisticated system to camouflage the origin of criminal funds. The suspects received deposits from clients through Chinese payment apps like WeChat and Alipay, used as initial channels for fundraising.

Once the resources were received, the operation followed a carefully designed route: purchasing cryptocurrencies in multiple international jurisdictions, transferring digital assets to wallets located in South Korea, converting digital holdings to Korean won, and finally distributing the legitimized money through dozens of local bank accounts.

To evade regulatory oversight, the detainees presented the transfers as everyday and legal expenses. Justifications included fees for aesthetic procedures for foreigners, educational expenses for students abroad, and other seemingly commercial transactions. In this way, they managed to move capital without raising immediate alerts in South Korea.

The Background: Why South Korea Becomes a Target for Launderers

The case emerges in a context where South Korea faces significant delays in implementing a comprehensive regulatory framework for cryptocurrencies. While authorities debate final regulations, local investors face restrictions on domestic trading, which has incentivized the massive outflow of digital capital to foreign platforms.

During 2025, more than $110 billion in digital assets left the country, according to blockchain analysis agency records. This regulatory gap not only weakens financial sovereignty but also creates vulnerable spaces that criminal actors systematically exploit.

Seoul Customs Office identified that the network operated through at least one unauthorized cryptocurrency exchange, although authorities have kept its identity confidential during the investigation.

Implications for South Korea and the Regional Crypto Market

The discovery underscores the consequences of lagging regulation. Without clear guidelines and effective supervision, South Korea is exposed to both infiltration of illicit activities and the relocation of its investor base. Analysts warn that as long as these regulatory gaps persist, similar cases will continue to multiply.

South Korean authorities have escalated the prosecution of the three Chinese citizens to the level of the prosecutor’s office, where they will face formal charges of conspiracy to launder assets, financial fraud, and violations of currency regulations.