TLDR
- Officers charged for shielding $186M crypto ring disguised as gift shops.
- Bribery scandal reveals how police helped crypto laundering network thrive.
- Illegal exchanges used storefront fronts to turn scams into USDT coins.
- $186M laundering case triggers harsh regulatory crackdown in South Korea.
- Police corruption fuels crypto crime; authorities ramp up anti-fraud action.
South Korean prosecutors have indicted two police officers for their alleged role in a major crypto laundering network worth $186 million. The officers reportedly accepted bribes to protect illegal crypto operators who converted voice phishing proceeds into digital assets. Authorities say the crypto laundering operation ran under the cover of legitimate storefronts and involved unregistered exchanges.
Police Officers Face Bribery Charges
Investigators confirmed that Superintendent F and Officer G accepted bribes between July 2022 and February 2024. Superintendent F allegedly received $59,000, while Officer G accepted about $7,500 in cash and luxury goods. Both officers have been suspended from duty and are now in custody.
Prosecutors revealed that the officers provided confidential case details to crypto operators. They also connected the suspects with lawyers and other law enforcement contacts. They reportedly intervened in efforts to unfreeze accounts tied to crypto laundering activities.
The Suwon District Prosecutors’ Office stated that both officers acted in coordination with a larger criminal network. Their actions allegedly allowed the crypto laundering ring to continue operations across Seoul. Authorities said their misconduct seriously undermined anti-money laundering enforcement efforts.
Network Operated Illicit Exchanges
The crypto laundering scheme centered on CEO B and an unidentified associate who ran multiple illegal exchanges. The suspects disguised their operations as gift certificate stores in busy districts like Yeoksam-dong between January and October 2024. These outlets converted criminal proceeds from voice phishing into Tether’s USDT stablecoin.
The suspects displayed anti-fraud signs to create a false impression of legitimacy. Investigators discovered that the network used these storefronts to conceal illicit crypto transactions. Authorities estimate the group laundered more than 249 billion won during its operation.
Prosecutors have frozen about $1.1 million in illegal assets, including $600,000 in USDT. They estimate total profits from the crypto laundering activities reached around $8.4 million. The remaining funds were either spent or hidden through undisclosed wallets.
South Korea Intensifies Crypto Oversight
South Korea has intensified its crackdown on crypto laundering and unregistered exchanges. The Financial Intelligence Unit recently imposed a three-month suspension on Upbit’s operator, Dunamu, for compliance violations. Regulators also fined the company 35.2 billion won for failing to meet anti-money laundering requirements.
Authorities continue to investigate offshore exchanges that lack local registration and KYC procedures. Many of these platforms were found to facilitate crypto laundering and evade oversight. Officials said ongoing inspections aim to strengthen enforcement and prevent future misuse of digital assets.
