According to the Korea Customs Service, more than $7.8 billion in illicit foreign exchange activity has been detected over the past five years, with crypto transactions accounting for over 80% of the total. Much of the activity involved stablecoins—most notably USDT—which were purchased domestically, transferred overseas, converted back into fiat currency, and then distributed to clients or criminal networks abroad.
Investigators say the schemes varied in scale and sophistication. Some relied on platforms such as Neteller Pay to move funds, while others were tied to criminal enterprises including voice-phishing organizations. In several cases, traders purchased stablecoins through over-the-counter desks in Hong Kong and elsewhere to help fraud rings launder money. Authorities also identified extensive use of “hwanchigi,” an underground remittance method where operators bypass the banking system using crypto-based transfers. Many of the groups involved have reportedly relocated operations to Southeast Asia, including Cambodia, Vietnam, and the Philippines, in an attempt to evade enforcement.
Recent arrests underscore the scale of the problem. One organization was caught moving approximately $630 million through stablecoins between South Korea and Vietnam, a flow authorities say represents only a fraction of the broader network.
In response, the Korea Customs Service is launching a newly formed 126-member criminal fund tracking team tasked with identifying and disrupting crypto-driven smuggling routes. Officials say the unit will focus on shutting down illicit cross-border transfers, tightening oversight of domestic foreign exchange operators, and targeting laundering groups operating from overseas hubs.
The crackdown signals a significant escalation in South Korea’s approach to crypto-related crime, with regulators warning that digital assets have become a dominant tool for concealing the movement of large volumes of money across borders. Authorities say they intend to intensify surveillance and enforcement as they work to dismantle the networks behind the schemes.
