South Korean police arrest 56 in takedown of Cambodia-linked USDT laundering network

Seoul police have dismantled a cryptocurrency laundering operation that moved approximately 16.8 billion won ($11.2 million) through Tether for a phishing syndicate based in Cambodia. 

56 people have been arrested in connection with the operation, and the ringleader, who is currently a fugitive, has been placed on an Interpol red notice.

Seoul police bust money laundering operation

South Korean police have arrested 56 people accused of laundering 16.8 billion won ($11.2 million) in proceeds from phishing and romance scams through the cryptocurrency Tether (USDT) for a criminal organization based in Cambodia. 

The Seoul Metropolitan Police Agency’s Metropolitan Investigation Unit said it referred all 56 suspects to prosecutors on charges including violations of the Foreign Exchange Transactions Act and the Specific Financial Information Act. 

Nine of the 56 arrested suspects, led by a person identified only by the initial “A” who is believed to be based in Cambodia, received Tether from foreign exchanges between February 2024 and April 2025. 

They sold the tokens on South Korean platforms and routed the won proceeds into shell-company accounts that the organizer controlled. Investigators traced approximately 14 billion won through this channel alone. 

A second cluster of 14 suspects operated inside what police described as a romance-scam cell also run from Cambodia. That group converted roughly 2.8 billion won in fraud proceeds into Tether on domestic exchanges, switched it back to local currency, and wired the cash to the organization’s leadership. 

Police in Daegu had already arrested and charged these individuals with defrauding 79 victims of about 4.4 billion won.

The remaining 33 suspects ran a separate illegal currency-exchange service for foreign tourists and personal contacts where they charged flat fees to buy Tether on one exchange, transfer it to another, and pay out in foreign currency or won, handling an estimated 6.3 billion won. 

An analysis of roughly 11,300 accounts linked to the first two groups of suspects uncovered 265 confirmed cases of voice phishing and investment fraud totaling about 25.7 billion won ($17.1 million) in victim losses. 

Police said the money gotten from phishing scams was recycled as “bait funds” after they were laundered. These funds are the initial payouts scammers use to simulate returns and lure victims into larger deposits. 

Investigators seized approximately 650 million won in criminal proceeds before indictment. So far, the organizer of the operation known as “A” remains at large, under an Interpol red notice. 

No money laundering in South Korea

South Korea has put in a lot of work toward curbing the rise of crypto-enabled money laundering. In January, customs authorities dismantled a separate $107 million laundering ring operated by three Chinese nationals who disguised the illicit transfers as payments for cosmetic surgery and university tuition over a four-year period.

In March, the Financial Supervisory Service, Korea Customs Service, and nine credit card companies signed an agreement to share overseas card-usage data in real time, specifically targeting phishing groups that operate across borders and move stolen funds through international card transactions and crypto exchanges.

Separately, Bithumb, South Korea’s second-largest crypto exchange, severed ties with payment processor Heleket in May after blockchain intelligence firm TRM Labs linked the service to a Russia-connected platform fined nearly CAD 177 million by Canadian regulators for money-laundering and terrorism-financing violations.

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