South Korean police have arrested 23 individuals for allegedly laundering cryptocurrency funds for a Cambodian criminal organization, according to reports from Newsis. The Seoul Metropolitan Police Agency's criminal investigative division confirmed the arrests, including two key individuals, and detained them for their involvement in the money laundering scheme. The investigation has now been referred to prosecutors on charges including violations of the Foreign Exchange Transactions Act and the Act on Reporting and Using Specified Financial Transaction Information.
From February 2024 to April 2025, the group reportedly moved $11.1 million in illegal funds through cryptocurrency operations, as reported by Newsis. The group allegedly laundered criminal proceeds of a Cambodia-based phishing organization by purchasing USDT (Tether) and transacting on domestic and overseas cryptocurrency exchanges. Police indicated that approximately 11,300 accounts were used for money laundering activities, with the network operating under instructions from a suspected ringleader identified as C. The group handled proceeds by purchasing Tether, transferring assets between exchanges, and carrying out illegal foreign exchange transactions.
According to the police investigation, the laundered funds were linked to roughly $17 million worth of stolen funds across 265 cases of phishing and investment scams, as reported by Newsis. The Seoul police have seized 650 million won ($430,000) worth of criminal proceeds from the suspects, with authorities securing pre-indictment seizure and forfeiture preservation orders covering the alleged criminal proceeds. The group's ringleader remains at large and is subject to an Interpol Red Notice, with investigators examining more than 11,300 accounts linked to the laundering operation that were used to route and disguise criminal proceeds before they entered the financial system.
The police investigation extended beyond the primary group, with authorities arresting 33 other individuals who allegedly provided illegal USDT-based currency exchange services worth approximately $4.2 million in transactions. According to police, these suspects accepted commissions from foreign tourists and acquaintances, purchased USDT through domestic and overseas exchanges, transferred the assets between platforms, and later converted them into foreign currency or Korean won for clients. A police official warned that conducting cryptocurrency transactions on behalf of others or exchanging digital assets into fiat currency for third parties can also be punishable under South Korean law.
The case arrives as South Korean authorities continue to expand enforcement efforts against crypto-related financial crime, with recent enforcement activity extending beyond criminal investigations. Earlier this month, blockchain analytics firm Chainalysis announced a cooperation agreement with the Korean National Police Agency that includes investigator training, certification programs and practical exercises focused on virtual asset crimes such as fraud, money laundering and cross-border theft. Authorities have established a dedicated task force targeting crypto-based money laundering, with investigators expected to focus on unregistered exchange operators and the movement of funds through stablecoins such as USDT.
