The post S. Korea Regulators Sound Alarm on Surge in Hwanchigi Schemes appeared on BitcoinEthereumNews.com.

The bulk of flagged transactions is tied to a practice known as “hwanchigi”, where illicit money is converted into crypto offshore, transferred back into Korea through exchanges, and then withdrawn in Korean won From 2021 to August 2025, customs data shows about ₩9.56 trillion (approximately $7.1 billion) worth of crypto-linked criminality referred to prosecutors, with roughly 90% of that tied to hwanchigi-type schemes Lawmakers in South Korea are pushing for stronger enforcement, more coordination between agencies (FIU and KCS), and improvements in tracking criminal funds and illegal foreign remittances Between January and August 2025, 36,684 suspicious transaction reports (STRs) were submitted by virtual asset service providers (VASPs), say South Korea’s Financial Intelligence Unit (FIU) and Korea Customs Service (KCS). The year is not over, yet this number already exceeds the combined total from all of 2023 (16,076) and 2024 (19,658). The bulk of flagged transactions is tied to a practice known as “hwanchigi”, where illicit money is converted into crypto offshore, transferred back into Korea through exchanges, and then withdrawn in Korean won. From 2021 to August 2025, customs data shows about ₩9.56 trillion (approximately $7.1 billion) worth of crypto-linked criminality referred to prosecutors, with roughly 90% of that tied to hwanchigi-type schemes. Related: Seoul Lifts 7-Year Ban, Allowing Crypto Firms Access to Capital and Tax Breaks Stablecoins at the Center of Cross-Border Abuse One of the highlighted cases is when an underground broker allegedly used Tether (USDT) to move about ₩57.1 billion (about $42 million) between South Korea and Russia via thousands of transactions.  There’s growing concern about the misuse of stablecoins (especially USDT), since they make cross-border transfers easier to move large sums covertly. As such, the country is planning to introduce stricter rules for digital asset services (including better reporting requirements and oversight) to combat these rising…

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Filed under: News - @ September 23, 2025 6:27 am