Chinese group arrested in South Korea for over $100 million in crypto asset money laundering using digital wallets

South Korean customs authorities have revealed a case where an international criminal network used digital wallets across multiple countries to launder approximately $107 million worth of cryptocurrency. Three individuals of Chinese nationality are scheduled to be prosecuted in connection with the case. This arrest highlights how inadequate cryptocurrency regulations in South Korea have become a breeding ground for illegal transactions.

Precisely Designed Crime Schemes Exploiting Multiple Countries and Digital Wallets

According to customs investigations, the three suspects systematically carried out illegal fund transfers over a period of about four years, from September 2021 to June 2025. Their methods were highly sophisticated: after purchasing cryptocurrencies in several countries, they transferred assets via digital wallets to wallets within South Korea, then further converted them into Korean won.

The criminals concealed the origin of the funds by making large transfers through multiple domestic bank accounts, disguising legitimate expenses such as cosmetic surgery costs and overseas education expenses for international students. This multi-stage asset movement intentionally made tracking by authorities difficult. The total amount used for money laundering reached 148.9 billion won (approximately $107 million).

Regulatory Delays Creating Oversight Gaps

The background of this case lies in the delayed development of a legal framework for the cryptocurrency market in South Korea. Financial authorities struggled to finalize comprehensive regulatory guidelines to respond to the growing prominence of cryptocurrencies as major investment assets. Opaque legal systems and transaction restrictions led many domestic investors to hold digital assets worth billions of dollars on overseas platforms.

This regulatory gap provided an environment for international criminal organizations to conduct illegal cryptocurrency transactions. The anonymity offered by digital wallet technology, combined with South Korea’s unclear surveillance system, allowed criminals to relatively easily evade fund tracking.

Challenges in International Cooperation and Enhanced Monitoring

This case demonstrates that money laundering using cryptocurrencies is an international issue that cannot be effectively addressed by a single country’s efforts. Tracking digital wallet transactions across multiple countries requires cooperation among customs agencies and financial authorities worldwide. South Korean authorities need to strengthen their monitoring systems for the cryptocurrency market and accelerate the development of regulatory frameworks to eliminate illegal exchanges.

Whether this arrest will serve as a catalyst for policymakers in South Korea to recognize the importance of cryptocurrency regulation remains to be seen.