South Korea’s Financial Intelligence Unit (FIU) has reported a rise in cryptocurrency related illicit activities. The agency has noted a record number of suspicious transactions, filed by virtual asset service providers (VASPs).
According to a local media outlet Nohap News, FIU received a total of 36,684 suspicious transaction reports (STRs) between January and August of 2025. The number surpasses the combined total of the past two years. In 2024, there were a total of 19,658 STRs filed. Notably, the numbers were lower in previous years with 199 in 2021, 17,977 in 2022, 16,076 in 2023, and 36,684 as of August this year.
The majority of flagged transactions are linked to “hwanchigi”, which translates to illegal foreign exchange remittances. Using this method, criminals convert their black-money into cryptocurrency through offshore accounts and it is generally done outside of South Korea. They then cash out the crypto within the country for South Korean won.
The Korea Customs Service (KCS) has referred a total value of about ₩9.56 trillion, or $7.1 billion to prosecutors, from 2021 to August 2025. From this, over 90% of these cases are linked to “hwanchigi.”
In May, customs officials discovered an underground broker accused of using the Tether (USDT) stablecoin to move about $42 million between South Korea and Russia illegally. Between January 2023 and July 2024, two Russian nationals were accused of carrying out over 6,000 illegal transactions.
Rep. Jin Seong-jun of the Democratic Party of Korea, a member of the National Assembly’s Planning and Finance Committee said, “As stablecoins have recently become widely used as a means of payment and settlement in the real economy, the potential for them to be misused for foreign exchange crimes such as money laundering is increasing.” He added, “Related organizations such as the Korea Customs Service and the FIU should establish systematic measures against new types of foreign exchange crimes, along with effective crackdowns such as tracking criminal funds and blocking disguised remittances.”
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