Chinese criminal group launders over $100 million in South Korea: Crypto transfer methods exposed

South Korean customs authorities recently uncovered a major cross-border money laundering case. Three Chinese suspects have been submitted to prosecutors for handling on charges of conducting cryptocurrency money laundering through unauthorized channels, involving an amount as high as 148.9 million KRW (approximately 107 million USD based on the current KRW to USD exchange rate). The case reveals the complex chain of how criminals utilize crypto assets and bank system vulnerabilities to transfer illegal funds.

Four Years of Hidden Operations: The Money Laundering Journey from 2021 to 2025

The criminal group involved has been active for up to four years. According to the Korean Customs Service investigation, these three Chinese suspects engaged in large-scale fund transfers from September 2021 to June 2025 through internal and overseas crypto asset accounts, as well as local Korean bank accounts. The entire operation was carefully disguised: transfers were labeled as legitimate expenses, including costs for foreigners’ cosmetic surgery and overseas education for students.

This concealment aims to evade financial regulatory scrutiny. Criminals know that any large abnormal transaction could trigger risk warning mechanisms, so they adopted strategies of dispersing expenses and falsifying consumption purposes.

Multi-country Crypto Purchases and Multiple Transfers: A Complex Crypto Flow Mechanism

Korean customs revealed the specific operational procedures of the criminals. To evade regulatory tracking, suspects purchased cryptocurrencies in multiple countries, then transferred them into digital wallets in Korea. Next, they converted crypto assets into Korean won and conducted dispersed transfers through multiple domestic bank accounts. This multi-step operation formed a complex chain of fund flows, greatly increasing the difficulty of tracking.

Seoul Customs Department pointed out that criminals also used instant messaging tools for transactions. According to Korean broadcasters, suspects collected deposits from clients via WeChat and Alipay, two Chinese payment platforms that became key channels for fund inflows and outflows. Although the specific cryptocurrencies involved remain unclear, the use of these payment tools demonstrates the international and covert nature of the operation.

KRW Exchange Rate Conversion: Understanding the Scale of Money Laundering

Converting 148.9 million KRW into USD is crucial. Based on the current KRW to USD exchange rate, this amount is approximately 107 million USD. This conversion process itself is also part of the money laundering chain—through frequent currency conversions and exchange rate fluctuations, criminals further obscure the true source of funds. Fluctuations in the KRW to USD rate directly impact the international value of the amount involved in the case and reflect the complexity of cross-border money laundering cases.

South Korea’s Crypto Regulation Dilemma: Why Criminals Choose This Location

The background of this case is South Korea’s regulatory dilemma in the crypto market. For years, Korean financial authorities have been working on establishing a regulatory framework for crypto assets, but a unified standard has yet to be finalized. This regulatory gap provides a breeding ground for illegal activities.

Reports indicate that due to the lack of clear domestic trading rules and strict restrictions, local investors are forced to store billions of dollars in digital assets on overseas platforms. This capital outflow phenomenon conveniently facilitates cross-border money laundering: more offshore accounts mean more transfer channels and increased difficulty in tracking.

Criminals have fully exploited this regulatory vacuum. Korean Customs authorities found that suspects used unauthorized and hard-to-trace crypto exchanges for operations. Since these platforms often lack identity verification or regulatory oversight, law enforcement finds it difficult to directly access transaction details.

Reflection and Regulatory Insights

This case of over $100 million in money laundering exposes vulnerabilities in the current crypto regulatory system. Korean authorities face not only a criminal case but also a severe test of the entire market oversight framework. How to balance protecting investors and combating crime, and how to establish more effective cross-border fund flow monitoring mechanisms, are urgent issues for Korea’s financial regulators.

Meanwhile, this case also serves as a reminder to other markets: the anonymity and cross-border flow characteristics of crypto assets, if not effectively regulated, can be easily exploited by criminals. Under fluctuations of the KRW to USD rate, the hidden amount of funds may be even more difficult to conceal. Building more transparent and standardized crypto market infrastructure has become a common challenge faced by many countries worldwide.