South Korean police officers fired over $186 million crypto money-laundering scheme

Two senior South Korean police officers have been formally indicted for allegedly accepting bribes from operators of an illegal cryptocurrency exchange. The companies are implicated in a sweeping money-laundering operation tied to voice-phishing scams in the country. 

According to a statement from the Suwon District Prosecutors’ Office Criminal Division, the illicit network laundered roughly $186 million (about 249.6 billion won) through illicit crypto conversion and cash-to-crypto shops.

The accused officers include a former chief of a Seoul police station, known only as “F”, and a senior officer identified as “G”. Prosecutors allege “F” received roughly $59,000 between July 2022 and February 2024. Meanwhile, “G” reportedly accepted about $7,500 in cash and luxury goods during the same period. Both have since been dismissed from their duties.

According to the indictment, the officers offered more than just passive acceptance of graft. In return for payments, they provided internal investigative details, facilitated the unfreezing of criminal-linked accounts, arranged access to lawyers, and made introductions to other law enforcement personnel.

The South Korean undercover EX ring laundered phishing proceeds

Prosecutors uncovered a criminal network that operated cash-for-crypto exchanges disguised as legitimate gift-certificate shops in affluent districts such as Gangnam and Yeoksam-dong in Seoul. Between January and October 2024, these fronts converted stolen funds, largely from voice-phishing fraud, into stablecoins such as USDT, giving the appearance of legitimate transactions.

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The laundering operation came to light after prosecutors re-examined a voice-phishing case originally referred by police. Their review exposed inconsistencies in an earlier decision not to indict the exchange’s executive, triggering a more thorough investigation. The probe eventually led to the arrest of both officers and several key operators of the crypto-exchange network.

Voice phishing has grown into an industrial-scale criminal enterprise in South Korea. Fraudsters operate from both domestic and offshore bases, targeting vulnerable individuals and small businesses.

Recently, authorities have stepped up enforcement, introducing tougher penalties and stronger cooperation with global partners. This latest indictment, however, exposes deep cracks within the system meant to uphold the law.

Authorities claimed it has frozen around $1.1 million in assets associated with the case, including about $600,000 in USDT. Prosecutors estimate that criminal proceeds amount to at least $8.4 million (11.2 billion won), with the remainder believed to have been spent or hidden.

This case comes amid a broader crackdown on crypto-linked financial crime. Earlier in 2025, the South Korean prosecution service formalised a dedicated unit to investigate virtual-asset crimes, a sign of growing concern over illicit funds mixing with legitimate crypto transactions.

The alleged involvement of police officers has shaken public confidence. Civic groups and opposition politicians are calling for an independent probe and stronger internal checks within the police service. They argue that corruption at this level undermines years of effort to combat financial crime and restore trust in digital finance systems.

Authorities insist the case demonstrates their commitment to transparency. The prosecution has stated that no individual, regardless of position, is above the law. Further arrests and indictments may follow as the investigation widens to include additional suspects connected to the illegal trading platforms.

Observers say the indictment, involving active collusion between law-enforcement officers and crypto criminals, strikes at the heart of public trust in institutions. When those meant to enforce anti-money laundering laws become part of the corruption, it severely undermines efforts to curb illicit finance in the growing digital-asset sector.

Prosecutors have charged the officers in line with the country’s laws addressing serious crimes and concealment of criminal proceeds. Details of the trial and potential sentencing remain pending.

The unfolding scandal serves as a stark reminder of the risks posed when digital assets intersect with organised crime and the crucial need for robust oversight. It also underscores why regulators and law-enforcement agencies must remain vigilant, especially as criminals continue leveraging crypto’s opacity to mask illicit funds.