Police have arrested and referred to prosecutors a large group of money handlers and unregistered currency dealers involved in laundering criminal proceeds for a Cambodia-based phishing organization. Some of them exchanged the stablecoin Tether between domestic and overseas exchanges before converting it into cash, and the laundered money was found to have been reused as bait funds for investment fraud organizations.
The Seoul Metropolitan Police Agency's Metropolitan Investigation Unit announced Sunday that it had arrested and referred 56 suspects on charges of laundering phishing proceeds or conducting illegal currency exchanges using cryptocurrency exchanges. Two of the key suspects were detained.
The crimes uncovered in the police investigation fall broadly into three categories. Nine people including a suspect surnamed A are accused of receiving about 14 billion won worth of Tether from overseas exchanges between February 2024 and April this year, acting on the instructions of ringleader Y, who is staying in Cambodia. They were found to have sold the cryptocurrency on domestic exchanges and then sent the proceeds to shell corporation accounts managed by Y. Police also confirmed circumstances indicating that this money passed through some 11,000 accounts and was used as initial bait funds for schemes such as investment fraud. The method involves first paying victims money that appears to be returns, in order to induce additional investment.
Fourteen people including a suspect surnamed J are accused of laundering about 2.8 billion won in proceeds while operating as members of a Cambodia-based romance scam organization. They were found to have bought Tether with criminal proceeds on domestic exchanges, converted it into local currency, and remitted it to the organization's ringleader and others. About 310 accounts, including accounts in their own names and illegally obtained bank accounts, were mobilized in the process.
Thirty-three people including a suspect surnamed K are accused of illegally exchanging about 6.3 billion won using cryptocurrency, charging a set fee to foreign tourists and acquaintances. The method involved buying and transferring Tether on domestic and overseas exchanges before paying out in foreign currency or won.
Police analyzed some 11,300 related accounts and confirmed 265 cases of damage, including voice phishing and investment fraud, totaling about 25.7 billion won. They also took pre-indictment confiscation and preservation measures against about 650 million won in criminal proceeds. An Interpol red notice has been issued for ringleader Y, who is staying in Cambodia.
"Acting on behalf of others in cryptocurrency transactions or exchanging it into won can also be subject to punishment," police said. "We will thoroughly investigate money laundering and illegal currency exchange crimes."
