South Korea’s customs authority has uncovered an alleged cryptocurrency laundering network that moved nearly 148.9 billion won (about $101.7 million) through the country over several years. The Korea Customs Service (KCS) informed that 3 Chinese nationals are now facing prosecution for suspected violations of the Foreign Exchange Transactions Act.

The case emerged as South Korea adjusts its digital finance rules. Officials have recently eased limits on corporate crypto investing while also pushing tougher compliance checks for cross-border crypto flows.

South Korea Crypto Laundering Network Used Local Wallet Routes

KCS said the operation ran for almost 4 years, from September 2021 to June 2025. Investigators traced unusual money movements linked to digital assets and unlicensed foreign exchange activity.

Authorities said the suspects bought crypto assets in several foreign countries. They then transferred the assets into digital wallets connected to South Korea.

After the funds entered South Korea, the group allegedly converted the crypto into Korean won. Investigators said the proceeds then spread across many domestic bank accounts, which complicated detection.

Fragmented Bank Transfers Helped Disguise Illicit Crypto Flows

Investigators said the group avoided large, obvious transfers. Instead, they broke funds into smaller movements that looked like routine transfers when viewed separately.

Officials also noted that the suspects used ordinary transaction descriptions to reduce scrutiny. They labeled transfers as common overseas payments, including cosmetic surgery expenses and tuition fees for students abroad.

KCS said those labels did not reflect the true purpose of the transfers. Investigators allege the descriptions acted as cover for unauthorized foreign exchange activity tied to cryptocurrency laundering.

Corporate Crypto Investment Rules Shift as Enforcement Tightens

The crackdown arrives during a major policy shift in South Korea’s crypto market oversight. Just last week, financial authorities lifted a long-standing ban on corporate cryptocurrency investments.

Under the new approach described in the provided information, listed companies can invest up to 5% of their equity capital in the top 20 digital coins by market value. The rule applies when those coins are listed on one of South Korea’s five main exchanges.

Meanwhile, the National Assembly passed amendments to the Capital Markets Act and the Electronic Securities Act. The updates create a legal path for tokenised securities and smart contracts under a clearer structure for blockchain-based finance.

KCS framed the laundering case as a warning sign for regulators. Officials said illicit networks may exploit gaps between digital asset monitoring and foreign exchange regulation as crypto activity expands.

Prosecutors will now review the case, following the KCS referral. Authorities have also signaled sharper tracking, compliance, and transparency efforts as more crypto flows move through regulated channels.

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