South Korean police have dismantled a major crypto laundering ring that moved roughly 16.8 billion won (about $11.1 million) in Tether (USDT) on behalf of a Cambodia-based phishing syndicate, authorities announced.
What happened
- The Seoul Metropolitan Police Agency’s criminal investigative division has referred 23 suspects to prosecutors on charges including violations of the Foreign Exchange Transactions Act and the Act on Reporting and Using Specified Financial Transaction Information. Two alleged key operatives, identified only as A and B, were arrested and detained.
- Investigators say the network—working under instructions from an overseas ringleader labeled C—bought USDT, shuffled assets between domestic and foreign crypto exchanges, and carried out illegal foreign-exchange transactions between February 2024 and April 2025 to conceal criminal proceeds.
- Police reviewed more than 11,300 accounts linked to the scheme and uncovered 265 cases of voice phishing and investment fraud amounting to roughly 25.7 billion won (about $17 million). Those accounts were used to route and disguise funds before they entered the formal financial system.
- Authorities also obtained pre-indictment seizure and forfeiture preservation orders for about 650 million won (approximately $430,000) tied to the operation. The suspected organizer remains at large and is subject to an Interpol Red Notice.
Related arrests for illegal exchange services
- In a separate but related sweep, police arrested 33 people accused of running illegal currency-exchange services using crypto. According to investigators, these suspects took commissions from foreign tourists and acquaintances, purchased USDT through domestic and overseas exchanges, moved assets between platforms, and converted them into foreign currencies or Korean won. Those transactions totaled about 6.3 billion won (roughly $4.2 million).
Why it matters
- Police warned that conducting cryptocurrency transactions or fiat conversions on behalf of others can be a punishable offense under South Korean law—an important reminder as criminals exploit stablecoins and cross-border exchanges to hide proceeds.
- The takedown comes amid an intensifying crackdown on virtual asset crime in South Korea. The Korean National Police Agency recently struck a cooperation agreement with blockchain analytics firm Chainalysis to provide investigator training, certifications, and practical exercises focused on fraud, money laundering and cross-border theft. A dedicated task force is also targeting crypto-based money laundering, unregistered exchange operators, and the flow of funds through stablecoins such as USDT.
Context
- Enforcement activity has broadened beyond arrests. South Korean police recently searched the offices of major exchange Bithumb in a separate probe linked to allegations that lawmaker Kim Byung-gi used political influence to help secure employment for his son at crypto firms.
The case underscores growing global scrutiny of stablecoins and cross-border crypto services as law enforcement builds tools and partnerships to trace and disrupt laundering networks.
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