South Korea Flags Record Suspicious Crypto Transactions in 2025

South Korean authorities have reportedly flagged a record number of suspicious crypto transactions this year, with the total already surpassing the combined numbers of the past two years. 

Citing Financial Intelligence Unit (FIU) data provided to Representative Jin Sung-joon and the Korea Customs Service (KCS) statistics, Yonhap News reported that local virtual asset service providers (VASPs) filed 36,684 suspicious transaction reports (STRs) between January and August 2025. 

STRs are one of South Korea’s core Anti-Money Laundering (AML) tools. Under the country’s laws, financial institutions, casinos and VASPs must file STRs when they have reasonable grounds to suspect that the funds involve criminal proceeds, money laundering or terrorist financing. 

According to the data, the STRs filed between January and August exceed the combined totals of 2023 and 2024, when STRs were 16,076 and 19,658, respectively. This year’s number also dwarfs 2021, which had 199 cases, and 2022, which had 10,797.

Authorities eye illegal foreign remittances and stablecoins 

South Korean officials said a majority of the flagged transaction flows involved “hwanchigi,” or illegal foreign exchange remittances. In these cases, criminal proceeds are converted into crypto using offshore platforms. These are routed into domestic exchanges and then cashed out in won. 

From 2021 through August 2025, the KCS referred $7.1 billion worth of crypto-linked crimes to prosecutors, with $6.4 billion (about 90%) tied to hwanchigi schemes. 

In May, customs officials uncovered an underground broker accused of using the Tether (USDT) stablecoin to illegally move about $42 million between South Korea and Russia. Two Russian nationals were accused of carrying out over 6,000 illegal transactions between January 2023 and July 2024. 

Because of cases like these, Jin urged agencies, including the KCS and the FIU, to strengthen effective enforcement to track criminal funds and block disguised remittances.

The official said the government agencies must establish systematic countermeasures against new types of foreign exchange crimes. 

Related: South Korea crypto firms get ‘venture company’ status next week

A global policy concern

South Korea’s numbers show a broader policy dilemma facing regulators around the globe. While stablecoins and digital currencies offer faster and cheaper payments, they also create new channels for illicit flows.

The European Union’s Markets in Crypto-Assets (MiCA) regulation addresses illicit cross-border transaction risks by requiring issuers to be licensed to ensure transparency.

It also caps large stablecoin volumes. MiCA limits stablecoin transfers to 1 million transactions per day or a notional value of 200 million euros per day.

In 2021, the European Central Bank’s policymakers floated the idea of limiting digital euro holdings to 3,000 euros per person to prevent unchecked foreign exchange activity. 

In 2023, the Bank of England proposed setting individual caps on digital pounds between 10,000 ($13,558) and 20,000 British pounds. However, UK crypto groups slammed the approach, saying these limits don’t work in practice. 

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