South Korea Uncovers Record 36,000+ Suspicious Crypto Transactions in 2025

Crypto surveillance hits unprecedented levels as regulators scramble to keep pace with digital asset innovation.

The Compliance Crackdown

South Korea's Financial Intelligence Unit flagged over 36,000 transactions showing patterns consistent with money laundering, tax evasion, and unauthorized cross-border transfers. The sheer volume represents a 300% increase from 2024 figures—proof that either illicit activity is booming or surveillance capabilities finally caught up with blockchain technology.

Regulatory Whack-a-Mole

Authorities deployed AI-driven monitoring systems that track wallet patterns, exchange flows, and transaction anomalies. Traditional banks reported zero suspicious activities during the same period—because apparently moving money through 19th-century systems makes it magically cleaner.

Market Impact

While compliance costs spike for legitimate exchanges, decentralized protocols continue operating unaffected. The gap between regulated and unregulated spaces widens—creating exactly the regulatory arbitrage opportunities that suspicious actors love.

Another day, another reason traditional finance thinks it's winning while missing the entire point of decentralized systems.

South Korea has hit a new milestone in crypto monitoring but it’s not one to celebrate. Authorities say the number of suspicious crypto transactions flagged this year has already smashed past the combined totals of the last two years.

What does this mean for you? Read on.

Record Surge in Reports

Between January and August 2025, local exchanges filed 36,684 suspicious transaction reports (STRs) with the Financial Intelligence Unit (FIU). That’s more than double last year’s total and far above the 16,076 cases in 2023.

The rise has been steep. Back in 2021, only 199 cases were reported. By 2022, that number shot up to nearly 18,000, and the curve hasn’t slowed since.

Illegal Remittances Driving the Spike

Officials say the bulk of these cases involve “hwanchigi”, or illegal foreign remittance schemes. Here, funds are converted into crypto through overseas platforms, funneled into local exchanges, and then cashed out in won.

The numbers highlight the scale: from 2021 through August 2025, the Korea Customs Service (KCS) referred ₩9.56 trillion ($7.1 billion) in crypto-related crimes to prosecutors. Of that, more than 90% came from money laundering schemes linked to hwanchigi.

Stablecoins in the Crosshairs

Stablecoins, once promoted as the future of easy payments, are now a growing concern for regulators. In May, customs officials uncovered a broker accused of moving ₩57.1 billion ($42 million) between South Korea and Russia using Tether (USDT). Two Russian nationals reportedly carried out over 6,000 illegal transactions between 2023 and 2024.

“As stablecoins have recently become widely used as a means of payment and settlement in the real economy, the potential for them to be misused for foreign exchange crimes such as money laundering is increasing,” said Rep. Jin Seong-jun.

Rep. Jin called on agencies like the FIU and KCS to strengthen their response, stressing the need for “systematic measures against new types of foreign exchange crimes” and tougher crackdowns, including tracking criminal funds and blocking disguised remittances.

A Global Problem, Not Just Korea’s

South Korea’s record figures reflect a wider challenge for regulators worldwide. The EU’s MiCA framework already places strict limits on stablecoin transactions, while central banks in Europe and the UK have floated caps on digital currencies to keep illicit flows in check.