South Korean police have detained 23 suspects in connection with a laundering network that moved about $11.1 million tied to a Cambodian phishing operation, authorities said.
The Seoul Metropolitan Police Agency reported that the group allegedly converted illicit proceeds into the stablecoin USDT and routed funds across domestic and overseas platforms. Between February 2024 and April 2025, the suspects are believed to have processed 16.8 billion won through 11,300 bank and exchange accounts.
Scale of the laundering network
Authorities linked the accounts to roughly $17 million in theft connected to 265 phishing and fraudulent investment cases. Police confirmed that two key members were arrested, while the suspected ringleader remains at large under an Interpol Red Notice. About 650 million won, or $430,000, has been seized so far.
The case highlights the scale and sophistication of layering techniques used to obscure the origin of funds. Moving money across thousands of accounts enabled the network to fragment transactions and reduce traceability.
Parallel crackdown on illegal exchange activity
In a separate but related investigation, Seoul police arrested 33 individuals accused of conducting unauthorized currency exchange operations using USDT. These services were reportedly offered to tourists and acquaintances, and those involved now face charges under financial and criminal laws.
Authorities framed both cases as part of a broader push to dismantle informal and unregulated routes for moving funds between digital assets and traditional financial systems.
Stablecoins under closer scrutiny
The use of USDT underscores the growing role of stablecoins in facilitating fast, cross-border transfers. While these features support legitimate activity, they are also under increasing scrutiny due to their role in illicit finance.
South Korean officials said digital assets accounted for 15.8% of all seized criminal proceeds in 2025, totaling 134.9 billion won, or about $101 million. The data reflects a wider trend of criminals incorporating digital assets into financial crime strategies.
Regulatory pressure is building
The enforcement push comes as lawmakers advance the proposed Digital Asset Basic Act, which introduces a clearer framework for digital assets. The bill classifies stablecoins as a “means of payment” under the Foreign Exchange Transactions Act, placing them under existing currency oversight rules.
Impact on market activity
For traders, the developments point to tighter compliance checks across both domestic and international platforms. Stronger identity verification and transaction monitoring are expected, particularly for transfers involving foreign services.
Authorities also warned against using unregulated or peer-to-peer exchange channels, stressing that such activity is increasingly targeted for enforcement.
Market backdrop
The crackdown coincides with rising consumer complaints in the digital asset sector, which surged 1,014% in 2025. South Korea remains one of the largest markets globally, recording $69 billion in trading volume in the first quarter of 2024, though that marked a 28% decline from a year earlier, steeper than the 20% global average.
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