Korean authorities have uncovered a Chinese criminal organization involved in money laundering, with over $107 million worth of cryptocurrency illicitly processed.

South Korean customs authorities have uncovered a large-scale money laundering case involving an international criminal organization. Three Chinese nationals have been sent to prosecutors on suspicion of moving cryptocurrencies through unauthorized channels and laundering assets worth approximately $107 million. This incident came to light amid South Korea’s struggles to establish a regulatory framework for the cryptocurrency market.

Cleverly Orchestrated Illegal Fund Flows

The suspects moved large amounts of cryptocurrencies over a period of three years and nine months, from September 2021 to June 2025, using complex methods. The criminal group purchased cryptocurrencies in multiple countries, transferred them through digital wallets into South Korea, converted them into won, and dispersed the funds across several bank accounts.

According to authorities’ investigations, a huge sum of 1,489 billion won (about $107 million) was moved through this route. The key to the crackdown was the method of disguising remittances. The suspects cleverly avoided financial surveillance by disguising legitimate expenses such as foreign cosmetic surgery costs and overseas education expenses for students.

Crime Scheme Exploiting Unlicensed Exchanges

According to the customs authorities’ announcement, the criminal group utilized unverified, unlicensed trading platforms rather than legitimate cryptocurrency exchanges. By using these illegal channels, they aimed to bypass traditional monitoring systems and evade law enforcement tracking.

Cryptocurrency accounts domestically and internationally, along with South Korean bank accounts, were interconnected, allowing funds to flow continuously. This layered system was designed to be difficult to detect from a single angle, making enforcement challenging.

Regulatory Gaps in South Korea and Increasing Overseas Asset Outflows

This crackdown highlights serious issues within South Korea’s cryptocurrency market. While the country is one of the major markets for cryptocurrency investments, clear regulatory guidelines are still incomplete.

As a result, local investors have low trust in domestic platforms and are moving large amounts of cryptocurrencies to overseas platforms. It is reported that hundreds of billions of dollars worth of assets have flowed out of South Korea in 2025 alone. This trend is believed to create a hotbed for illegal remittances.

In an environment with insufficient regulatory oversight, not only legitimate investors but also criminal organizations find it easier to operate. This case exemplifies how such regulatory gaps can be exploited.

Law Enforcement Actions and Future Challenges

South Korean authorities have indicated the need to strengthen monitoring of international organized crime networks through this incident. Tracking the flow of cryptocurrencies across multiple countries will be a key challenge moving forward.

At the same time, the South Korean government is under pressure to rapidly complete the regulatory framework for the cryptocurrency market. Clear rules and transparent trading environments can significantly deter illegal fund inflows and protect legitimate investors.

This case, involving the seizure of over $107 million, underscores the importance of combating financial crimes in the cryptocurrency market and highlights the urgent need for countries to develop comprehensive regulatory systems.