Hwanchigi remittances stay the most important driver of suspicious circumstances.
Stablecoins, particularly Tether, are utilized in cross-border laundering schemes.
Lawmakers push for tighter monitoring and international cooperation.
South Korea has reported a dramatic rise in suspicious cryptocurrency transactions in 2025, signalling deepening considerations over cash laundering and cross-border crime.
In line with knowledge from the Monetary Intelligence Unit (FIU), home exchanges filed 36,684 suspicious transaction experiences (STRs) between January and August. This already surpasses the mixed totals of the earlier two years.
Authorities say a lot of the rise stems from unlawful international remittance actions, identified domestically as “hwanchigi”, the place digital belongings are used to bypass capital controls and funnel cash overseas.
The surge highlights how crypto crime has quickly developed right into a systemic concern for regulators.
Suspicious transactions hit historic highs
The expansion in flagged transactions has accelerated in recent times. In 2021, solely 199 circumstances had been reported. By 2022, this surged to just about 18,000, adopted by 16,076 in 2023.
The 2024 whole doubled that determine, however the 2025 knowledge for August has already set a brand new file.
The Korea Customs Service (KCS) referred ₩9.56 trillion ($7.1 billion) in crypto-linked crimes to prosecutors between 2021 and August 2025.
Greater than 90% of those circumstances had been tied to hwanchigi-related laundering actions, the place crypto is used as an middleman to disguise and reroute funds.
Officers word that exchanges are submitting STRs at unprecedented ranges, displaying each elevated surveillance and better ranges of suspicious exercise.
Stablecoins linked to international transfers
Regulators have more and more flagged stablecoins as a key software in illicit cross-border transactions. Stablecoins are designed to reflect fiat currencies and are sometimes used for quicker settlement. Nevertheless, their position in international change crimes has turn out to be extra seen.
In Could 2025, customs officers uncovered a case involving ₩57.1 billion ($42 million) moved between South Korea and Russia utilizing Tether (USDT).
The investigation discovered two Russian nationals had accomplished greater than 6,000 unlawful transfers between 2023 and 2024. Such circumstances present how stablecoins could be exploited to sidestep monetary restrictions, together with sanctions and capital controls.
Specialists highlighted this threat, pointing to the rising use of stablecoins in the true economic system and their vulnerability to prison misuse.
The South Korean parliament has urged companies to scale up monitoring to stop disguised remittances and to hint prison funds extra successfully.
Lawmakers demand stronger measures
South Korean lawmakers have pressed for harder enforcement mechanisms, notably in opposition to new sorts of international change crimes linked to crypto.
Calls have been made for the FIU and KCS to develop coordination, improve transaction monitoring, and tighten compliance necessities for exchanges.
Authorities are additionally exploring methods to strengthen cooperation with worldwide regulators. With hwanchigi circumstances usually involving international intermediaries and platforms, officers stress the necessity for international partnerships to restrict cross-border laundering.
Discussions concentrate on enhancing info sharing and creating stricter frameworks for reporting suspicious stablecoin transactions.
A world regulatory problem
The dimensions of South Korea’s STR filings mirrors related considerations elsewhere. The European Union has launched its Markets in Crypto-Belongings (MiCA) framework, which units limits on stablecoin transaction volumes and mandates compliance checks to stop monetary crime.
In the meantime, central banks within the UK and Europe have thought of introducing transaction caps on digital currencies to scale back illicit flows.
South Korea’s knowledge underscores how regulators worldwide are grappling with the identical concern: the right way to stability innovation in digital funds with monetary integrity.
With crypto adoption rising, the problem for policymakers stays stopping misuse with out stifling official use of the know-how.
