In South Korea’s capital Seoul, police have exposed a massive money laundering scheme worth 16.8 billion won, allegedly flowing through Tether (USDT) and linked to a Cambodia-based fraud network. The investigation led to the detention of 56 individuals, whose files have now been forwarded to prosecutors. An Interpol red notice has been issued for the fugitive mastermind identified as the organizer.
The scope of the investigation
Seoul Metropolitan Police Agency’s special investigation unit announced that the suspects were referred to the prosecution on multiple charges, including violations of the Foreign Exchange Transactions Act and the Act on the Reporting and Use of Specific Financial Transaction Information. According to officials, the network channeled proceeds from phishing and relationship-based scams through Tether, the stablecoin commonly known as USDT.
Mini glossary: An Interpol red notice is an international alert requesting member countries to locate and provisionally arrest a person pending extradition. Tether is a stablecoin pegged to the US dollar.
Police reported that funds gained from the scams were laundered and recirculated as bait money, creating the illusion of returns for victims through these fake payments.
According to police accounts, the first group consisting of nine suspects purchased Tether from overseas crypto exchanges between February 2024 and April 2025. The assets were then sold on platforms based in South Korea, and the resulting won proceeds were funneled into shell company accounts under the organizer’s control. Investigators traced around 14 billion won through this channel alone.
Three distinct fraud cells unmasked
Another 14 individuals allegedly operated within a separate fraud cell, also managed from Cambodia. This group reportedly converted approximately 2.8 billion won in proceeds to Tether at local exchanges, later switching it back to Korean won and handing it off to network leaders. According to Daegu police, these suspects had previously caused financial losses totaling 4.4 billion won to at least 79 victims.
The remaining 33 suspects were found to provide illicit currency exchange services to foreign tourists and personal contacts. Their operation involved buying Tether from one exchange and sending it to another, settling payments in either foreign currency or Korean won. Authorities calculated that this group handled an estimated 6.3 billion won in transactions.
| Group | Number of suspects | Amount |
|---|---|---|
| First cell | 9 | 14 billion won |
| Second cell | 14 | 2.8 billion won |
| Third cell | 33 | 6.3 billion won |
Victim losses and fresh countermeasures
Reviewing approximately 11,300 accounts associated with the first two groups, investigators identified 265 proven cases of voice phishing and investment scams. Victims’ total losses reached 25.7 billion won. Even before formal indictment, authorities managed to seize about 650 million won identified as illicit gains.
The Seoul police confirmed that all 56 suspects have been handed over to the prosecution, while a red notice has been filed through Interpol for the fugitive ringleader known as A.
South Korea has been ramping up oversight to combat illegal cryptocurrency flows. In January, customs officials dismantled a separate 107 million dollar ring operating over four years, which masked illicit transfers as payments for cosmetic surgery and university tuition. By March, the Financial Supervisory Service, Korea Customs Service, and nine credit card companies signed a deal to share overseas card transaction data in real time to monitor cross-border scam networks. Additionally, Bithumb, one of the country’s largest crypto exchanges, ended its partnership with payment processor Heleket this May.
