South Korean customs officials have disrupted an international money laundering operation valued at approximately 148.9 billion won ($101.7 million). The Korea Customs Service (KCS) announced Monday that three individuals have been referred to prosecutors for allegedly violating the Foreign Exchange Transactions Act.
The operation, which spanned from September 2021 through June 2025, utilized cryptocurrency as a primary tool to move large sums of money. According to KCS, the suspects employed a sophisticated method to conceal the illicit nature of the funds. They made crypto asset purchases across various jurisdictions, moved them to crypto wallets in South Korea, converted the assets to local currency, and then funneled the money through numerous South Korean bank accounts. The funds were often disguised as legitimate expenses, such as tuition fees or cosmetic surgery payments.
Tactics Used to Evade Detection
To avoid detection, the individuals involved in the laundering ring strategically spread their operations across several countries, purchasing cryptocurrency in jurisdictions where regulations were less stringent. Once the crypto assets were in South Korea, they were quickly converted to Korean won and funneled through a network of domestic bank accounts, effectively masking the true origins of the funds. These efforts were intended to make the transactions appear legitimate, allowing them to circumvent local laws designed to prevent such illegal activities.
This crackdown reflects South Korea’s growing efforts to tackle illegal foreign exchange activities. Authorities are increasingly focused on the risks posed by underground money exchange operations, which threaten to destabilize the nation’s currency market. The KCS’s heightened inspections also come against the backdrop of significant discrepancies between trade proceeds reported by banks and the actual value of goods declared to customs. The gap reached around $290 billion in 2025, marking the largest difference in five years.
Growing Crypto Activity Under Scrutiny
While the focus remains on combating illicit foreign exchange practices, the crackdown also brings attention to South Korea’s expanding cryptocurrency market. As of June 2025, the market capitalization of crypto assets in South Korea had reached 95 trillion won ($64.6 billion), with an average daily trading volume of $4.35 billion. This rapid growth in crypto trading has made the country a hub for both legitimate and illegal crypto transactions, prompting authorities to step up their efforts to address potential risks.
Moreover, a separate investigation revealed that a staggering 97% of surveyed companies involved in foreign exchange transactions were engaging in illicit activities, totaling 2.2 trillion won. This discovery highlights the extent of unlawful practices across various sectors, further compounding the need for more stringent enforcement and monitoring.
As South Korean authorities continue their crackdown on illegal financial operations, the spotlight on cryptocurrency and its potential for misuse will only grow.