Illegal Crypto Transfers Surge in South Korea, Says FIU

Written by Aaron S.,

Editor-In-Chief

Last Updated: September 22, 2025

Key Takeaways

South Korea logged 36,684 suspicious crypto transactions in early 2025, more than in 2023 and 2024 combined;
Most flagged cases involve "hwanchigi", where illegal funds are sent overseas via crypto;
Officials linked $6.4 billion in crypto crimes to these schemes and urged stronger agency cooperation.

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South Korean regulators have seen an increase in flagged cryptocurrency transactions in 2025, according to a report by Yonhap News.

According to data from the Financial Intelligence Unit (FIU) and the Korea Customs Service (KCS), 36,684 suspicious transaction reports (STRs) were submitted by local crypto-related businesses between January and August.

These reports are required when financial institutions, gambling establishments, or crypto service platforms detect possible links to illegal money sources or funding for unlawful activities.

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In 2023, there were 16,076 such reports, and 19,658 in 2024. By contrast, only 199 were recorded in 2021, and 10,797 in 2022.

A large portion of the cases in 2025 involve illegal currency transfers known as "hwanchigi". These schemes include criminals exchanging illicit money into cryptocurrency through platforms abroad.

Between 2021 and August 2025, roughly $7.1 billion in crypto-related criminal cases were referred to prosecutors by the KCS. Around 90% of this amount, approximately $6.4 billion, was linked to hwanchigi.

In one case from May 2025, officials uncovered a broker accused of illegally transferring $42 million between South Korea and Russia using Tether USDT $1.00 . Authorities claimed that two Russian individuals conducted over 6,000 illegal transactions during an 18-month period starting in 2023.

Lawmaker Jin Sung-joon has called for stronger cooperation between the KCS and the FIU. He has urged them to improve their ability to trace illegal transfers and prevent funds from being hidden through complex cryptocurrency methods.

Recently, South Korea’s Financial Services Commission (FSC) proposed a bill to regulate stablecoins pegged to the South Korean won. What does the bill include? Read the full story.