South Korean Police Target Crypto Laundering for Cambodia-Based Phishing Ring
South Korean authorities have apprehended dozens of individuals accused of laundering funds for a Cambodia-based phishing operation through cryptocurrency transactions. The crackdown comes as an expert from Chainalysis warns that the ecosystem of scam compounds in Southeast Asia continues to pose a “persistent concern” despite years of efforts to dismantle criminal networks.
The Seoul Metropolitan Police Agency’s crime investigation division reported that 23 suspects have been referred for charges including violations of the Foreign Exchange Transactions Act and the Specific Financial Information Act. Two individuals, identified only as A and B, have been detained, according to local media.
In addition to these arrests, 33 other suspects were apprehended for allegedly engaging in the illegal exchange of $4.1 million (6.3 billion won) in cryptocurrency. The alleged ringleader, known only as C, remains at large and is now the subject of an Interpol Red Notice.
Investigators also secured approximately $431,000 (650 million won) in illicit proceeds through pre-indictment confiscation.
Police stated that the group, acting under C’s directives, moved around $11.1 million (16.8 billion won) between February 2024 and April 2025. Their method involved purchasing the USDT stablecoin, transferring it between domestic and overseas exchanges, and then cashing out into foreign currency or South Korean won for a fee.
A review of over 11,300 linked accounts revealed 265 instances of phishing-related harm, encompassing voice phishing and investment fraud, with a total value of $17 million (25.7 billion won).
Authorities urged the public to exercise caution, emphasizing that “acting as an agent for another person’s virtual asset trading or exchanging virtual assets for Korean Won can also be subject to punishment.”
Persistent Threat in Southeast Asia
Xue Yin Peh, head of investigative strategy and collections for APAC at Chainalysis, told Decrypt that increased international scrutiny has yielded concrete results against the “persistent problem” of scam compounds and their associated illicit networks. She highlighted significant actions from the past year, including the recovery of 61,000 Bitcoin by UK authorities and a $15 billion forfeiture linked to the Prince Group, noting these cases signify “a meaningful shift toward dismantling the global financial infrastructure that supports crypto fraud.”
However, Peh observed that transnational criminal networks have “demonstrated significant flexibility and resilience,” relocating within and beyond Southeast Asia and adapting their operational models as enforcement tightens. These networks rely on a broad illicit ecosystem comprising laundering networks, infrastructure, and trafficked labor, which she described as “remarkably resilient,” with new service providers “quickly filling gaps left by enforcement takedowns.”
Stablecoins like USDT remain the preferred tool for illicit fund flows because, as Peh explained, criminals utilize them “for largely the same reasons legitimate users do”: liquidity, portability, and relative price stability. She added that on-chain transactions are “transparent and traceable,” and issuers can freeze funds once illicit activity is detected.
Peh believes that cases like this “certainly can, and already have” bolstered the argument for enhanced global oversight of stablecoins. She suggested that stablecoin issuers should be integral to the “fraud-prevention front line” and that clearer legal frameworks are necessary to facilitate coordination among issuers, exchanges, banks, and authorities when victim funds are at risk.
In November, Interpol designated scam-compound networks as a global transnational threat. The same month, U.S. agencies established a multi-agency Scam Center Strike Force to track illicit funds. The Strike Force has since frozen, seized, and forfeited over $580 million in cryptocurrency linked to networks operating out of Burma, Cambodia, and Laos.
Around the same period, Taiwanese prosecutors charged 62 individuals in connection with the network of Cambodian tycoon Chen Zhi, chairman of Prince Group. Chen Zhi was extradited to China earlier this year amid allegations linking his business empire to cyber scam networks.
In April, Cambodia enacted its most stringent anti-scam legislation to date via royal decree, imposing potential life sentences on compound operators. However, analysts have cautioned that such measures might merely shift the illicit trade across borders rather than eradicate it.
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