South Korean Police Probe Counterfeit Cash Ring That Targeted Crypto Traders

Police in South Chungcheong province are investigating a criminal group accused of manufacturing counterfeit Korean won bills and using them to defraud cryptocurrency traders during in-person transactions.

According to Chosun Ilbo, the group was found in possession of 9,188 fake 50,000-won notes, with a value of about 459.4 million won ($330,000), last year. Investigators said the suspects printed the bills using a color printer and contacted crypto traders online to arrange face-to-face exchanges of cash for digital assets.

The scheme unraveled when a prospective victim noticed the poor quality of the notes during a meeting in Asan City and refused to complete the transaction, instead alerting police.

The use of counterfeit cash in crypto transactions is not new. Such scams exploit the speed and informality of face-to-face trades, where large sums of money can change hands quickly and verification of banknotes may be limited. Hong Kong, in particular, saw a wave of similar cases last summer, showing how counterfeit currency has become a recurring risk in over-the-counter crypto markets.

In one Hong Kong case in July 2024, police arrested three people accused of defrauding a businessman of $400,000 in USDT in Mong Kok, a popular commercial district. Officers seized more than 11,000 counterfeit banknotes in that raid, exceeding the total number of fake notes confiscated in Hong Kong during the entire previous year.

Two months earlier, police in the same area arrested three cryptocurrency exchange staff members for allegedly conning a customer out of HK$128,000 ($16,000) in a USDT-for-cash transaction. The suspects used “hell money,” fake notes printed on joss paper traditionally burned in rituals that are easily available at shops in Hong Kong, to deceive the victim.

In the South Korea case, three men in their 30s and 40s, identified only as Mr. A, Mr. B and Mr. C, were arrested in connection with the scheme. Police arrested Mr. A and Mr. C last October and November, while Mr. B fled to Cambodia. An Interpol red notice was issued for his arrest and he was detained upon reentering South Korea through Incheon Airport from China on Nov. 5 this year.

Investigators said the suspects claimed they committed the crimes to cover living expenses while unemployed.

Mr. A and Mr. B have been indicted, while Mr. C remains under investigation after a bench warrant was initially rejected. Police said they plan to reapply once supplementary investigations are complete.

The officers involved in the case received an award for preventing the spread of counterfeit cash from the Bank of Korea on Friday. The central bank, which presents the prizes twice a year, said the team made a significant contribution to apprehending counterfeiters.

In a statement, the bank urged the public to inspect cash carefully in well-lit areas, check hologram movement while counting bills, and report suspected counterfeit money immediately. It also pointed to its revamped counterfeit money detection app as a tool for verifying banknotes.

The case comes amid a broader rise in crimes linked to in-person interactions. Over the past year, authorities and security experts have warned about an increase in so-called “wrench attacks,” which are physical assaults aimed at forcing victims to unlock crypto wallets or transfer funds.

Jameson Lopp, chief technology officer of crypto security firm Casa, has documented at least 66 physical crypto-related assaults in 2025 so far, including kidnappings and home invasions targeting investors, influencers and even their family members.