South Korean Customs Authorities Uncover $101.7 Million Crypto Fraud Scheme

Summary:
The South Korean Customs Service has dismantled a significant money laundering operation involving a staggering 150 billion won ($101.7 million) in cryptocurrency. This operation included several international transactions and underscores the nation’s efforts to strengthen crypto regulations.

Key Takeaways

South Korean Customs has dismantled a $101.7 million crypto fraud ring involving money laundering.
Three Chinese nationals were arrested for violating foreign exchange laws.
Criminals used popular payment platforms to evade financial monitoring.
South Korea is intensifying regulations on cryptocurrency transactions.
A record number of suspicious transactions were reported in 2025.

South Korean Customs crypto fraud

Major Drug Ring Discovered by South Korean Customs Service

The South Korean Customs Service (KCS) has successfully dismantled a criminal network that was involved in laundering nearly 150 billion won, equivalent to $101.7 million, through a sophisticated money laundering scheme.

According to a report from Korean Yonhap, three Chinese individuals have been arrested for breaching the foreign exchange transactions act. Between September 2021 and June 2025, the crypto funds were laundered through an elaborate system that manipulated both domestic and international crypto accounts, as noted by the customs office.

Method of Operation: Criminals Targeting Foreign Investment

The customs agency disclosed on Monday that these criminals are now facing money laundering charges for receiving deposits from customers via popular payment platforms like WeChat Pay and Alipay.

To avoid detection by financial regulators, they allegedly acquired virtual assets from various countries. These cryptocurrencies were then moved to digital wallets in South Korea, where they were converted into Korean won.

The criminals utilized a range of deceptive methods to exchange trade fees and make duty-free purchases, as well as funds allocated for studying abroad. Additionally, some of the funds were routed as legitimate expenditures, such as cosmetic surgery fees for foreign nationals.

Strengthening Crypto Regulations in South Korea

In an effort to establish itself as a global cryptocurrency hub, South Korea has been rapidly adopting cryptocurrencies throughout 2025. However, the rise in suspicious crypto transactions signals a strong commitment to security within this burgeoning sector.

Recently, the South Korean government announced plans to enhance oversight of cryptocurrency transfers below 1 million won. This new regulation aims to close a loophole that previously enabled users to bypass identity verification.

In September, South Korea reported a significant uptick in suspicious crypto transactions, with a record 36,684 flagged in 2025, exceeding the total number from the last two years combined.

According to Representative Jin Sung-joon and statistics from the Korea Customs Service, local virtual asset service providers (VASPs) filed these 36,684 suspicious transaction reports (STRs) from January through August of 2025.

This increased scrutiny reflects the government’s drive to ensure a robust regulatory framework for the evolving crypto market.