Crypto-linked crime from South Korea to Cambodia has skyrocketed 1,400 times in the past year, revealing alarming gaps in anti-money laundering (AML) oversight.
Transfers between the two nations, largely involving USDT stablecoins, have drawn scrutiny after Korean exchanges like Bithumb and Upbit processed billions of won in suspicious transactions. Much of this capital reportedly flowed to Huione Guarantee, a Cambodian platform sanctioned by the U.S. and U.K.
Experts say the spike underscores how stricter local enforcement in Korea has driven criminal syndicates offshore.
“It’s extremely difficult to detect all suspicious transactions before they occur,” said Youchull Jung, a white-collar crime attorney at Lee & Ko. The transfers highlight how foreign jurisdictions like Cambodia and the Philippines have become new operational hubs for crypto-based scams.
BTC's price trends to the downside on the daily chart. Source: BTCUSD on Tradingview
Seoul Weighs New Sanctions After U.S. Crackdown on North Korean Crypto Laundering
The revelations come as South Korea reviews potential sanctions targeting North Korea’s cyber-financing networks.
On November 7, Vice Foreign Minister Kim Ji-na confirmed that Seoul could “review sanctions as a measure if they are really needed,” emphasizing coordination with the United States to counter Pyongyang’s crypto theft operations.
The U.S. Treasury recently sanctioned eight North Korean nationals and two entities, including the Korea Mangyongdae Computer Technology Company (KMCTC) and Ryujong Credit Bank, for laundering stolen digital assets to fund weapons programs.
Analysts, such as Tiger Research’s Ryan Yoon, note that while new measures may have a limited short-term impact, they signal intensified coordination between Seoul and Washington on curbing crypto-funded proliferation threats.
Regulation Tightens as South Korea Leads in Compliance Reform
South Korea’s crypto market, valued at over $84 billion, has become a test case for striking a balance between innovation and regulation.
The 2024 Digital Asset Act and Travel Rule bolstered exchange oversight, but outdated foreign exchange laws have left cross-border crypto flows in a gray zone. Regulators now face the dual challenge of protecting investors while closing loopholes exploited by bad actors.
Amid growing global scrutiny, Seoul’s stance could shape the future of crypto compliance across Asia.
If South Korea tightens sanctions and AML controls further, analysts say it may catalyze a new era of coordinated digital finance enforcement, stretching from Washington to Phnom Penh, and turning the region’s crypto boom into a geopolitical battleground.
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