South Korea Uncovers $101.7M Cross-Border Stablecoin Network Using Crypto and Domestic Bank Accounts

South Korean authorities are stepping up oversight of digital asset flows as stablecoins increasingly feature in large-scale financial crime and unauthorized foreign exchange activity. Regulators reported a sharp rise in suspicious crypto transactions last year, with flagged cases climbing by more than 50% year-on-year as digital assets become more deeply embedded in cross-border payment chains.

Officials have identified stablecoins such as USDT and USDC as recurring instruments in schemes involving illegal remittances, disguised capital transfers and structured laundering. Lawmakers warned that the speed and liquidity of stablecoin transactions are being exploited to bypass existing foreign exchange controls, echoing patterns previously documented in BrokersView coverage on misuse of bank and digital accounts to rapidly move illicit funds.

Laundering Network Moving $101.7 Million Uncovered

The regulatory concerns coincided with a major enforcement action by the Korea Customs Service (KCS), which dismantled an international laundering network accused of moving nearly 150 billion won (approximately $101.7 million) through unauthorized crypto-based foreign exchange channels.

According to KCS, three Chinese nationals were referred to prosecutors for violating South Korea’s Foreign Exchange Transactions Act. Investigators said the group laundered funds between September 2021 and June 2025 by exploiting a web of domestic and overseas cryptocurrency accounts alongside multiple South Korean bank accounts.

Funds were routed through stablecoins purchased across several jurisdictions, transferred into digital wallets based in South Korea, converted into Korean won and dispersed through fragmented domestic transactions. Authorities said the activity was deliberately structured to reduce traceability and delay detection.

Transactions Disguised as Legitimate Expenses

Customs officials noted that transfers were routinely masked as ordinary expenditures, including overseas study costs, cosmetic surgery fees for foreign nationals, duty-free purchases and trade-related payments. Similar cover narratives have appeared in investment-app scams and pseudo-broker operations, where criminal proceeds are concealed behind routine commercial explanations.

Regulatory Thresholds Tightened

In response to these developments, South Korea has tightened monitoring of crypto transfers, including enhanced identity verification for transactions below 1 million won — a threshold previously used to fragment and conceal illicit flows.

Between January and August 2025, local virtual asset service providers filed 36,684 suspicious transaction reports, surpassing the combined totals of the previous two years. Authorities say the figures reflect both increased enforcement pressure and the expanding role of digital assets in cross-border financial crime.