South Korean Customs investigators reported that they uncovered a large money-laundering operation where nearly 148.9 billion won, or $102 million, was moved using cryptocurrency and local banks.
The Korea Customs Service (KCS) said Monday that it has referred three individuals to prosecutors for alleged violations of the Foreign Exchange Transactions Act, according to the news agencies.
The report also showed the agency alleges that the operation came through from September 2021 to June 2025.
How the scheme allegedly worked
According to the report, the group operated for almost four years, disguising illegal money as routine or personal payments, like cosmetic surgery fees or school tuition, to avoid suspicions.
They reportedly brought crypto to different countries and sent it to crypto wallets in South Korea, converting it into Korean won. They dispersed the money across numerous local bank accounts, thereby complicating the tracking process.
Besides these methods, the criminals routed funds through multiple local banks under the disguise of legitimate expenses, making the transactions look routine and staying out of suspicion.
As the country tightens its regulations over controlling illegal foreign exchange and underground money transfers, the enforcement comes to light. The KCS announced a year-end inspection of the market to ensure that no operations threaten exchange rate stability.
The bigger picture behind the simple transactions
Korean Authorities saw the numbers in its foreign exchange flows no longer adding up, prompting authorities to be more cautious. The gap between the trade payments processed by the banks and the value of goods reported to customs totalled roughly $290 billion in 2025, which was the largest discrepancy in five years.
The gap led to growing concerns of illicit capital movements, as reported by the KCS’s statements.
The KCS inspection in 2025 targeting the trade industry proved that out of 104 companies examined, 97% were found to have been a part of illicit foreign exchange transactions, totaling approximately 2.2 trillion won.
According to authorities, the enforcement of the Financial Action Task Force (FATF) Travel Rule still has shortcomings among virtual asset service providers (VASPs).
South Korea has had many regulations to keep their global trades in check. However, the case has highlighted weak points in the system and notified the authorities to push for tougher controls in three major areas, such as high-value service industries, renewed data sharing between agencies, and greater scrutiny of crypto “off-ramps,” where digital assets are converted into fiat currency.
