In a significant crackdown, the South Korean government has uncovered a massive cryptocurrency laundering scheme amounting to $101.7 million (150 billion Won). The operation, which was active from September 2021 until June 2025, has led to the arrest of three Chinese nationals.
The laundering process involved illicitly transferring funds across borders using cryptocurrencies. Criminals exploited popular Chinese payment applications, such as WeChat Pay and Alipay, to facilitate these transactions. These platforms allowed for quicker transfers compared to traditional banking methods in South Korea.
According to investigators, the suspects would collect money from clients using these payment apps and then use numerous cryptocurrency accounts to acquire various digital currencies in different countries. Once the cryptocurrencies were purchased, they were sent to crypto wallets based in South Korea. There, the assets were converted into South Korean won and withdrawn locally.
To avoid detection, these transactions were disguised as legitimate expenses, including trade fees, overseas education costs, and cosmetic surgery fees for foreigners. This tactic helped build a façade of credibility around the transfers and minimized suspicion from authorities.
South Korean officials noted that spending small amounts in various countries to buy cryptocurrencies allowed the perpetrators to circumvent stringent foreign exchange and anti-money laundering (AML) regulations. This approach enabled them to move funds into South Korea under the guise of legitimate expenditures.
In response to this alarming discovery, the South Korean government is intensifying scrutiny of cryptocurrency transfers under 1 million won. This aims to close potential loopholes that could be exploited for small transactions that evade identity verification.
Data from the Korean Customs Service indicates a sharp rise in suspicious crypto transactions, with 36,684 flagged between January and August 2025—more than in the previous two years combined. As the threat of crypto-related crime escalates, regulators are implementing stricter monitoring measures.
This operation not only highlights the complexities of cryptocurrency usage in illegal activities but also underscores the growing need for enhanced regulatory frameworks to combat such financial crimes.
