Cryptocurrency laundering of $107 million: how a criminal group concealed assets in South Korea

Three Chinese citizens carried out one of the largest cryptocurrency money laundering operations in recent years in South Korea. According to local customs authorities, the criminals transferred digital assets totaling approximately 1.49 trillion won ($107 million) through a complex network of cryptocurrency and bank accounts over more than three years — from September 2021 to June 2025.

The case revealed not only the scale of cryptocurrency crime but also serious issues in the regulation of digital assets in the country, where local investors are forced to hold billions of dollars in cryptocurrencies on overseas platforms due to the lack of a clear regulatory framework.

Cross-Border Scheme: From WeChat Payments to Cryptocurrency Wallets

Customs authorities found that the criminal group organized the operation through an unauthorized crypto exchange, using WeChat and Alipay payment systems to receive deposits from clients. The main scheme aimed to bypass financial authorities’ controls through multi-stage asset transformation.

Initially, the criminals purchased cryptocurrencies in several countries, then transferred them to digital wallets in South Korea. The next step involved converting the cryptocurrency funds into Korean won — a process where $100 was exchanged at the current exchange rate with the won, creating the appearance of legitimate financial transactions.

After converting assets into the local currency, the money was moved through numerous internal bank accounts, making it extremely difficult to trace the origin of the funds and the ultimate beneficiaries.

Masking as Cosmetics and Overseas Education

A key element of the concealment strategy was disguising transfers as legitimate expenses. The criminals documented payments as costs for cosmetic procedures for foreign nationals or educational expenses for students studying abroad.

This tactic allowed them to avoid additional scrutiny from financial regulators when conducting international transfers. Customs authorities emphasize that the criminals deliberately used documentation that appeared as ordinary private expenses rather than suspicious financial operations.

Lack of Cryptocurrency Market Regulation — The Root of the Problem

The revelation of this case comes amid prolonged disagreements among South Korean financial regulators regarding the development of a unified regulatory framework for the cryptocurrency market. The absence of clear rules and restrictions on cryptocurrency trading forces local investors to store significant volumes of digital assets on foreign platforms.

According to analytical reports, the amount of cryptocurrency held by South Korean investors outside the country is measured in tens of billions of dollars. This situation not only facilitates the work of criminal groups but also diverts legitimate investments from the local financial ecosystem.

Customs authorities emphasize that cryptocurrency has long become a primary investment asset in South Korea, yet regulatory bodies have yet to reach a consensus on its oversight structure. This creates favorable conditions both for illegal activities and for capital outflows abroad.

The case of three Chinese citizens demonstrates that the lack of adequate regulation of the cryptocurrency market has a dual effect: it attracts criminal elements and forces honest investors to transfer their assets to foreign platforms in search of greater transparency and security.