Major crackdown on crypto money laundering: Seoul police arrest 23 suspects in $11 million illegal USDT trafficking case
South Korean law enforcement conducted a large-scale operation to suppress the activities of an organized criminal group specializing in money laundering through the stablecoin Tether (USDT). During the investigation carried out by the financial unit of the Seoul police, 23 people were detained, two of whom were arrested on charges of playing key roles in the scheme.
According to the investigation, the criminal network operated in close coordination with a phishing organization based in Cambodia. The main mechanism for legalizing criminal proceeds was built on converting capital through cryptocurrency exchanges, both local and foreign.
Details of the Criminal Scheme
Investigators identified three main areas of illegal activity. The first group, consisting of nine people led by suspect "A," acted on the orders of ringleader "Y," who is based in Cambodia. From February 2024 to April 2026, they received Tether (USDT) worth approximately 14 billion won (about $9.2 million) on foreign exchanges.
The criminals then purchased and transferred USDT, after which they disbursed the funds in foreign or national currency. The second group, comprising 14 people, including suspect "A" and suspect "J," conducted about 24,500 illegal exchange transactions worth approximately 16.8 billion won (about $11.1 million) over the same period.
Analysis of approximately 11,300 related accounts revealed damages from 265 cases of phishing and investment fraud totaling about 25.7 billion won (approximately $17 million). Criminal proceeds worth 650 million won (about $430,000) were seized from the suspects.
Separate Group of "Money Changers" and International Manhunt
On the same charges, police detained another 33 people who illegally provided currency exchange services to tourists and acquaintances through USDT. According to the investigation, this group exchanged about 6.3 billion won (approximately $4.1 million).
The scheme was standard for illegal exchangers: the suspects purchased and transferred the Tether stablecoin on domestic and foreign exchanges, then issued cash in foreign currency or won (KRW) to clients, charging a commission. This method allowed them to bypass official exchange channels and conceal the origin of the funds.
The leader of the organization remains at large. An international manhunt has been launched for him through Interpol with a "red notice."
Analyst's comment: This case once again highlights that stablecoins, despite their popularity for legitimate transactions, remain a favored tool for criminals due to their liquidity and ability to move quickly between jurisdictions. Until regulators implement strict KYC/AML mechanisms at the protocol level, such schemes will persist, and the fight against them will fall on the shoulders of law enforcement, who, as we can see, are gradually building expertise in this area.