Red criminal china dismantled in South Korea laundered over 107 million dollars in cryptocurrencies

GasFeeVictim · 2026-01-31T20:22:22+00:00

South Korean authorities have made significant strides against digital financial crime by prosecuting three Chinese citizens involved in a scheme that illicitly laundered over 1,000,000,000,000,000,000,000 (one quintillion) won through cryptocurrency. This operation, which exploited unlicensed exchanges and popular payment platforms, underscores the urgent need for clearer regulations in the cryptocurrency market as criminal activities continue to rise and evolve. Efforts to strengthen oversight and implement stricter compliance measures are essential to combat these sophisticated schemes and protect consumers and the financial system.

GasFeeVictim

2026-01-31 20:22:22

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South Korean authorities have dealt a significant blow to digital financial crime. Three Chinese citizens have been referred to the prosecutor’s office after an investigation revealed cryptocurrency laundering operations totaling $107 million (148.9 billion won) carried out between September 2021 and June 2025.

Three individuals in the spotlight: from arrest to prosecution

The criminal network operated an unauthorized cryptocurrency exchange, channeling funds through popular digital payment systems in Asia. The detainees received deposits from clients via WeChat and Alipay, payment platforms used to move money discreetly. The case was uncovered by the Seoul Main Customs Office of the Korea Customs Service, which documented the operation reported by local agencies such as Yonhap and MBC News.

The laundering scheme: sophistication and camouflage

The suspects’ modus operandi involved multiple layers of masking. They purchased cryptocurrencies in various countries, transferred them to digital wallets in South Korea, converted the funds to South Korean won, and then routed the money through numerous domestic bank accounts. To evade regulatory oversight, transactions were disguised as legitimate expenses: fees for cosmetic surgeries for foreigners and study abroad costs for students.

South Korea faces the regulatory dilemma of the crypto market

The case emerges in a context where South Korea is struggling to establish a clear regulatory framework for cryptocurrencies. The lack of definitive guidelines has created a paradoxical effect: local investors hold billions of dollars in digital assets on foreign platforms, seeking to avoid domestic restrictions. This regulatory gap not only facilitates capital flight but also creates opportunities for criminal networks looking to exploit legal ambiguity to launder illicit assets.

The dismantling of this international operation in South Korea underscores the growing sophistication of cryptocurrency laundering schemes and the urgency of regulatory coordination among nations to combat digital financial crime.

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