In South Korea, customs officials have uncovered a vast money laundering network allegedly operated through cryptocurrencies and the local banking system. The authorities reported that approximately $101.7 million in illegal funds were concealed using complex transactions that spanned several years. This operation emerged at a time when abnormal foreign exchange movements were intensifying, and the cryptocurrency market was rapidly expanding. The investigation has increased the scrutiny of financial oversight mechanisms over cryptocurrency-based transactions.
The Network Built with Cryptocurrencies and Banks Dismantled
On Monday, the Korea Customs Service (KCS) announced that three individuals have been referred to the prosecution for violating the Foreign Exchange Transactions Act. According to the information provided by the country’s news agency, Yonhap, the network is purported to have been operational from September 2021 to June 2025. The network is alleged to have executed international fund transfers under the guise of legitimate expenses, such as cosmetic surgery and education fees.
The investigation file reveals that the suspects purchased cryptocurrencies in various countries, transferred these assets to digital wallets in South Korea, and then converted them into local currency. The funds were distributed through multiple bank accounts. Authorities emphasized that this method complicated tracking by utilizing both the cryptocurrency ecosystem and the traditional banking infrastructure.
KCS identified the transactions as systematic rather than isolated incidents, involving extensive long-term planning. The investigations show that cross-border money movements are becoming increasingly sophisticated, with cryptocurrencies playing a central role in this process.
Currency Controls and Market Pressure
The operation coincided with a period when South Korea was tightening its scrutiny of illegal foreign exchange activities. On January 13th, the KCS announced the commencement of a year-long “intensive inspection” targeting underground money transfer networks. Officials highlight that such activities pose a threat to the stability of exchange rates.
According to official data, by 2025, the gap between commercial foreign exchange revenue passing through banks and the declared value of goods to customs had reached approximately $290 billion. This difference, reaching its highest level in the past five years, has raised concerns over unregistered capital movements. Furthermore, a separate investigation targeting a specific sector uncovered illegal transactions worth a total of 2.2 trillion won in 97% of the inspected companies.
All these developments have brought the rapidly growing cryptocurrency market in the country into focus. According to the Financial Services Commission, as of June 2025, the total market value of cryptocurrencies in South Korea reached 95 trillion won. The average daily transaction volume came in at about $4.35 billion, signaling that the regulatory pressure is likely to amplify.