In short
- South Korea’s Customs Authority has dismantled an alleged crypto money laundering operation accused of moving an estimated 149 billion won using crypto and bank accounts.
- Prosecutors have not disclosed any arrests, asset seizures or whether charges have been filed.
- The case reflects South Korea’s enforcement-led oversight of cross-border crypto flows, Decrypt was told.
South Korea’s customs authorities have dismantled an alleged crackdown cryptocurrency money laundering operation involving funds worth more than $101 million.
Three Chinese nationals have been referred to prosecutors after Korean Customs uncovered an alleged cryptocurrency money laundering scheme involving money being funneled across national borders, according to a report by Yonhap News Agency published by Korean times on Monday.
Korean Customs officials said the case involved the cross-border movement of cryptocurrency, where the suspects “allegedly laundered 148.9 billion won between September 2021 and June last year” by “operating domestic and foreign cryptocurrency accounts and Korean bank accounts.”
The agency did not name any exchanges, intermediaries or financial institutions, or outline the methods used to transfer the funds.
Authorities have not released the identities of the suspects, confirmed whether any arrests have been made or indicated whether any assets have been seized or frozen. Prosecutors also have not announced whether formal charges have been filed.
At the time of writing, the case was still in the referral phase and prosecutors were expected to determine next steps.
Declutter has contacted Korean Customs and the Korean National Police for comment and will update this article if they respond.
‘Enforcement first, regulations second’
Observers told it Declutter The case reflects South Korea’s enforcement-oriented approach to overseeing cross-border crypto activities under existing currency laws, with customs authorities taking the lead, while compliance expectations for exchanges are largely seen as a continuation of already heightened scrutiny.
“This move clearly demonstrates South Korea’s ‘enforcement first, regulation later’ approach,” Siwon Huh, researcher at South Korean crypto research firm Four Pillars, told me. Declutter.
The country’s regulations, Huh said, “remain incomplete” due to “conflicts between the Bank of Korea and the Financial Services Commission.”
In the absence of a comprehensive law governing cross-border crypto flows, South Korea relies on foreign exchange regulations, with enforcement largely falling to customs as crypto becomes a common channel in currency crime cases, Huh explained.
“A notable point is that South Korea’s intervention in cross-border cryptocurrency movements is guided by Korean Customs and not by financial supervisory authorities,” Huh said, citing the agency’s data showing that more than 80% ($6.8 billion) of foreign exchange crimes discovered in the past five years were “related to cryptocurrency transactions.”
Huh also pointed to a separate case that came to light in May 2025, in which customs authorities said US$38.7 million (57.1 billion won) was illegally transferred between South Korea and Russia through more than 6,000 transactions using Tether’s USDT. stable currency.
The case shows South Korea’s “aggressive, technology-driven enforcement” under the Virtual Asset User Protection Act of 2024, Alexandre Philippine, co-founder of Web3 accelerator SkryLabs, said. Declutter.
“With a 40% increase in crypto seizures reported by the Financial Supervisory Service (FSS) by 2025, this signals a ‘regulate-first’ policy to combat sanctions evasion amid global tensions,” he noted.
The latest research could “increase compliance” among local players and “mandatory real-time transaction flagging and stricter AML audits” as the country formalizes its frameworks, “in line with FATF standards and reflective of Asia’s broader wave of repression,” Phillippine added.
This approach comes as South Korea tightens crypto surveillance, with authorities increasing AML controls and coordination around cross-border flows.
The case appears to reflect how South Korean law enforcement authorities are “building a more sophisticated interagency coordination framework,” Tim Sun, senior researcher at Hashkey, told me. Declutter. “The core logic of the regulations has shifted from merely combating crypto-related fraud to exercising stricter control.”
Disclosure: HashKey Holdings Limited, through HashKey Capital, is one of 22 investors in editorially independent Decrypt.
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