South Korean authorities flagged record numbers of suspicious crypto transactions this year, with the total number reportedly already exceeding the total figures over the past two years.
Yonhap News reported that the Financial Intelligence Unit (FIU) had submitted 36,684 suspicious transaction reports (STRS) between January and August 2025, citing data provided in Representative Jin Sung-Joon and Korean Customs Services (KCS) statistics.
STR is one of Korea’s core money laundering (AML) tools. Under national law, financial institutions, casinos and VASPs must file an STR if there is reasonable basis to suspect that the funds will involve criminal proceeds, money laundering, or terrorist financing.
According to the data, STRs submitted between January and August exceeded the totals in 2023 and 2024, when STRs were 16,076 and 19,658, respectively. I also had a war run in 2021, when there were 199 cases and 10,797 cases in 2022.
Authorities see illegal foreign remittances and stubcoins
South Korean officials said the majority of flagged transaction flows include “Hwanchigi” or illegal forex remittances. In these cases, criminal proceeds are converted to crypto using offshore platforms. These are then routed to domestic exchanges and then cashed out at WON.
From 2021 to August 2025, KCS referred $7.1 billion worth of crypto-related crimes to prosecutors, linking $7.4 billion (approximately 90%) to the Hwanchigi scheme.
In May, customs officials discovered an underground broker accused of using The Tether (USDT) Stablecoin to move around approximately $42 million between South Korea and Russia. The two Russian citizens were accused of carrying out more than 6,000 illegal transactions between January 2023 and July 2024.
For these cases, Jin has urged agencies such as KCS and FIU to track criminal funds and strengthen effective enforcement to block disguised remittances.
Officials said agencies must establish systematic measures against new types of forex crime.
Related: Korean crypto companies will acquire “venture company” status next week
Global policy concerns
South Korea’s figures illustrate the broader policy dilemma facing regulators around the world. Stablecoins and Digital Currencies offer faster and cheaper payments, but also create new channels for illegal flows.
European Union’s Cryptographic Dismantling (MICA) regulations address illegal cross-border transaction risks by requiring issuers to be licensed for transparency.
It also caps large Stablecoin volumes. MICA limits Stablecoin relocations to an estimated 1 million transactions per day, or 200 million euros per day.
In 2021, European Central Bank policymakers raised the idea of limiting digital euroholding to 3,000 euros per person to prevent unchecked foreign exchange activities.
In 2023, the Bank of England set individual caps on digital pounds between 10,000 ($13,558) and £20,000. However, the UK crypto group denounced the approach and said these limitations don’t really work.
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