Customs officials in South Korea have uncovered a large-scale money laundering network allegedly run through cryptocurrencies and the local banking system. Authorities announced that the movement of approximately $101.7 million in illicit funds was concealed through complex transactions spanning years. The operation took place at a time when anomalies in the country’s currency movements were deepening and the cryptocurrency market was growing rapidly. The investigation has further increased the pressure of financial control mechanisms on cryptocurrency-based transactions.
The Network Established Through Cryptocurrencies and Banks was Disrupted
Korea Customs Service (KCS) announced on Monday that it had referred three people to the prosecutor’s office for violating the Foreign Exchange Transactions Act. According to the information provided by the country’s news agency Yonhap, it is claimed that the network operated between September 2021 and June 2025. It is stated that the network in question makes international fund transfers under the guise of legal expenses such as plastic surgery and education fees.
According to the investigation file, the suspects purchased cryptocurrencies in different countries, transferred these assets to digital wallets in South Korea, and then converted them into local currency and distributed them through multiple bank accounts. Authorities emphasized that this method makes it difficult to track using both the cryptocurrency ecosystem and traditional banking infrastructure.
KCS stated that the detected transactions were not singular, but had a systematic structure and involved long-term planning. Studies reveal that cross-border money movements are becoming increasingly sophisticated, and cryptocurrencies play a central role in this process.
Foreign Exchange Controls and Market Pressure
The operation coincided with a period when South Korea was tightening controls against illegal foreign exchange activities. KCS announced on January 13 that “intensive inspection” practices that will last throughout the year have begun and underground money transfer networks will be targeted. Authorities point out that such activities threaten exchange rate stability.
According to official data, the difference between commercial foreign exchange revenues passing through banks and the goods values reported to customs reached approximately 290 billion dollars in 2025. This spread, which reached the highest level in the last five years, increased concerns about unregistered capital movements. Additionally, a separate investigation into a specific industry found illegal transactions totaling 2.2 trillion won in 97 percent of the companies inspected.
All these developments brought the cryptocurrency market into focus in the rapidly growing country. According to Financial Services Commission data, as of June 2025, the total market value of cryptocurrencies in South Korea reached 95 trillion won. The average daily transaction volume was at the level of 4.35 billion dollars. The increase in volume indicates that regulatory pressure will become stronger.
