Seoul police detain 23 in $11.1 million crypto laundering case tied to Cambodian phishing network

Seoul police have detained 23 people on suspicion of laundering 16.8 billion won ($11.1 million) through cryptocurrency for a Cambodian organization that made money from phishing. For PSPs and crypto exchanges, the useful bit is simple: the laundering ran through local and overseas exchanges, with USDT as the main transport layer and a lot of account hopping to make the money look less connected to its source.

1. South Korean authorities say the group moved 16.8 billion won ($11.1 million) between February 2024 and April 2025 by buying USDT and shifting assets across different crypto exchanges. Police believe about 11,300 accounts were used in the process, and that the funds were linked to $17 million in theft across 265 phishing and investment fraud cases.
2. The accounts were used to disguise the origin of the proceeds before the money reached bank accounts. Police also confiscated 650 million won ($430,000), while the alleged organizer remains at large and is being sought by Interpol.
3. In a separate investigation, 33 people were detained over illegal foreign-exchange activity involving USDT worth a total of 6.3 billion won ($4.2 million). Investigators say they took commissions from foreign tourists and acquaintances, bought USDT on local and overseas exchanges, moved assets between platforms, and then converted them into foreign currency or Korean won for clients.
4. Under South Korean law, crypto transactions made on behalf of other people, or exchanging digital assets into fiat for third parties, can trigger criminal or administrative liability. That matters for any operator using intermediaries, because the underlying flow may be treated as more than just a sloppy compliance setup.
5. South Korea has also set up a special task force to fight crypto-linked money laundering. Police said they will track the movement of funds using USDT and other stablecoins, and move against deals routed through illegal exchangers. In 2025, the scale of the issue showed up in reporting data: from January to August 2025, local virtual asset service providers (VASP) filed 36,684 suspicious transaction reports, according to the Financial Intelligence Unit (FIU) and the Korea Customs Service (KCS).

For high-risk PSPs, the operational takeaway is not subtle: exchange hopping, stablecoin use, and third-party conversion services are exactly the patterns regulators and police are now mapping more aggressively in South Korea.