Chinese crime ring arrested in South Korea laundered over $100 million worth of crypto

Three Chinese nationals arrested in South Korea have been referred to prosecution after allegedly laundering $107 million worth of cryptocurrency, local custom officials reported on Monday.

The arrests in South Korea come amid the financial regulatory authorities seeing delays in agreeing on a crypto market framework in a country where cryptocurrency has become a primary investment asset. However, because of the lack of clear guidelines and crypto trading restrictions in place, local investors now hold billions of dollars worth of crypto in overseas platforms, according to a report by Aju Press.

South Korean custom authorities said the international criminal ring they uncovered was laundering millions of dollars worth of crypto through an unauthorized and unidentified crypto exchange, according to South Korean news agency Yohnap. It remains unclear which cryptocurrencies were used in the operation. However, the Seoul Main Customs Office of the Korea Customs service said the group received deposits from customers through WeChat and Alipay, according to MBC News.

The three Chinese nationals detained and referred for prosecution allegedly laundered 148.9 billion won ($107 million) between September 2021 and June of last year by exploiting domestic and overseas cryptocurrency accounts and South Korean bank accounts, the customs agency said.

Authorities said the detainees transferred the assets under the guise of legitimate expenses, such as cosmetic surgery fees for foreign nationals or overseas study costs for students, Yonhap reported.

The authorities explained that to evade monitoring by financial authorities, the suspects allegedly purchased cryptocurrency in multiple countries, transferred it to digital wallets in South Korea, converted it into Korean won, and then funneled the money through numerous domestic bank accounts.