South Korea Reports Surge in Crypto-Related Illicit Activities
South Korea’s Financial Intelligence Unit (FIU) has seen a sharp rise in suspicious cryptocurrency transactions. Virtual asset service providers (VASPs) filed a record number of reports in 2025.
According to Nohap News, the FIU received 36,684 suspicious transaction reports (STRs) from January to August 2025. This number exceeds the total STRs filed in the past two years combined. In 2024, there were 19,658 STRs. The figures for previous years were 199 in 2021, 17,977 in 2022, and 16,076 in 2023.
Illegal Foreign Exchange Remittances Drive Most Cases
Most flagged transactions involve “hwanchigi,” an illegal foreign exchange remittance method. Criminals convert black money into cryptocurrency through offshore accounts. They then cash out the crypto in South Korea for Korean won.
The Korea Customs Service (KCS) referred cases worth about ₩9.56 trillion ($7.1 billion) to prosecutors from 2021 to August 2025. Over 90% of these cases are linked to “hwanchigi.”
In May, customs officials uncovered an underground broker using the Tether (USDT) stablecoin to move $42 million illegally between South Korea and Russia. Two Russian nationals allegedly conducted over 6,000 illegal transactions from January 2023 to July 2024.
Lawmakers Call for Stronger Measures Against Crypto Crimes
Rep. Jin Seong-jun of the Democratic Party, a member of the National Assembly’s Planning and Finance Committee, warned about stablecoins’ misuse. He said, “As stablecoins have recently become widely used as a means of payment and settlement in the real economy, the potential for them to be misused for foreign exchange crimes such as money laundering is increasing.”
He urged agencies like the Korea Customs Service and FIU to develop systematic measures. These should include tracking criminal funds and blocking disguised remittances to combat new foreign exchange crimes effectively.
