South Korean Police Arrest Operators Behind Six-Year Exchange Fraud Scheme

Key Takeaways

• Authorities in South Korea have arrested three individuals accused of operating an illegal currency exchange operation.
• The unlicensed foreign exchange scheme used USDT and Neteller Pay to send money abroad.
• Between 2019 and 2024, the scheme processed nearly a trillion won, netting its operators over $25 billion in fees.

Authorities in South Korea have arrested three individuals suspected of conducting illegal foreign exchange transactions worth nearly a trillion won.

According to prosecutors cited by local media, the group used USDT and Neteller Pay to operate an unregistered foreign currency exchange, netting over $25 billion in commission in the process.

Authorities Bust Illegal FX Empire

As described by prosecutors, an unnamed foreign exchange service collected KRW from Korean customers with the promise of fast overseas transfers, often to offshore gambling sites.

The won was then converted to Neteller Pay balance or USDT. (Neteller is a U.K.-based payments and money transfer platform.)

Neteller funds were used directly on offshore gambling sites or transferred to other Neteller users overseas. Meanwhile, USDT was sent to crypto wallets held abroad, especially in Hong Kong and Singapore.

Overseas agents allegedly converted the digital coins to local currency and delivered cash or made payments on behalf of the Korean customers.

Underground Currency Exchange

By collecting fees from clients, the scheme’s operators reportedly earned over 25.7 billion won between 2019 and 2024.

Since the operation bypassed currency exchange licenses and reporting requirements, all the income was untaxed and off-the-books.

“We will continue to thoroughly crack down on new types of money laundering and wealth outflow through illegal currency exchange due to the diversification of payment methods,” the prosecution said.

Assets Seized

In the process of tracing illegal currency flows, authorities identified and seized assets, including 32 real estate properties and cryptocurrency worth billions of won.

A warrant against an individual identified as “Mr. A” in court documents resulted in the seizure of assets worth 4.2 billion won, including 1,144 ETH and luxury goods worth 200 million won.

Commenting on the case, the prosecutors’ office stated: “We will do our best to track down the proceeds of crime to the end and recover them ultimately so that the principle that ‘crime does not lead to profit’ is established.”