South Korea Reports Record 36,684 Suspicious Crypto Transactions in 2025

Suspicious Crypto Activity Hits Record High in South Korea

South Korea has reported its highest-ever number of suspicious cryptocurrency transactions, flagging 36,684 cases between January and August 2025, according to new government data.

The figure—sourced from the Financial Intelligence Unit (FIU) and the Korea Customs Service (KCS)—already surpasses the combined totals of 2023 (16,076) and 2024 (19,658). The scale marks a sharp contrast to earlier years, with just 199 reports in 2021 and 10,797 in 2022.

Suspicious Transaction Reports (STRs) are a central part of South Korea’s Anti-Money Laundering (AML) framework. Under national law, banks, casinos, and Virtual Asset Service Providers (VASPs) must file STRs when they suspect criminal proceeds, money laundering, or terrorist financing.

Illegal Remittances Driving Crypto Crime

Officials noted that most flagged cases involved “hwanchigi”, a term for illicit foreign exchange remittances. In these schemes, criminal proceeds are converted into cryptocurrency using offshore platforms, funneled into local exchanges, and cashed out in South Korean won.

Between 2021 and August 2025, the KCS referred $7.1 billion in crypto-linked crimes to prosecutors. Of this, $6.4 billion (nearly 90%) was tied to hwanchigi-related activity.

One notable case surfaced in May 2025, when customs authorities uncovered an underground broker accused of using Tether (USDT) to illegally move $42 million between South Korea and Russia. Two Russian nationals allegedly carried out over 6,000 illicit transactions from January 2023 to July 2024.

Lawmakers Call for Stronger Oversight

Representative Jin Sung-joon urged regulators, including the FIU and KCS, to take tougher enforcement measures to block disguised remittances and trace criminal funds.

“Government agencies must build systematic countermeasures against emerging types of foreign exchange crimes,” Jin stated.

Authorities are now weighing stronger collaboration between regulators and exchanges to prevent loopholes that enable cross-border crypto laundering.

A Growing Global Policy Concern

South Korea’s surge in suspicious crypto activity highlights a global regulatory challenge: balancing the benefits of faster, cheaper payments with the risks of illicit financial flows.

• European Union: The EU’s Markets in Crypto-Assets (MiCA) framework addresses cross-border risks by requiring licensing for issuers and capping stablecoin transactions at 1 million per day or €200 million in value.

• European Central Bank (ECB): In 2021, ECB policymakers suggested capping digital euro holdings at €3,000 per person to prevent misuse.

• United Kingdom: In 2023, the Bank of England proposed digital pound limits of £10,000–£20,000 per person, though local crypto groups criticized the measures as impractical.

Conclusion: Rising Urgency for Crypto Oversight

With South Korea’s suspicious crypto activity surpassing two years’ worth of prior records in just eight months, regulators face mounting pressure to tighten enforcement. The country’s struggles with illegal remittances and stablecoin misuse reflect broader concerns shared by global policymakers.

As crypto adoption expands, governments worldwide are racing to implement frameworks that strike the right balance between innovation and security—a debate that is far from settled.

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