South Korea’s crypto market is expanding, with ownership now spanning across various digital assets and wealth brackets. However, this growth has a concerning side effect: authorities have identified a two-year high in suspicious crypto transactions originating within its borders.
Between January and August 2025, South Korea’s local virtual assets service providers (VASPs) flagged 36,684 suspicious transaction reports (STRs). The detail was reported by the Yonhap News, citing statistics from the Korea Customs Service (KCS).
Crypto firms in South Korea are mandated to report dubious transactions under the Specific Financial Information Act. The national Financial Intelligence Unit (FIU) keeps track of these reports that are also required from the crypto firms as part of South Korea’s national anti-money laundering (AML) laws.
The aim is to identify potentially criminal misuse of crypto assets to facilitate illicit activities like money laundering and terror financing.
Citing government officials, Yonhap News said, that majority of the STRs this year so far have been linked to illegal foreign exchange remittances. In such instances, criminally-linked funds are first converted into crypto, wired into South Korea, and then cashed out into won.
Jin Sung-joon, the chairperson of South Korea’s Democratic Party has reportedly directed government agencies like the FIU and the KCS to deploy advanced mechanisms in order to identify suspicious crypto transactions in early stages and take actions in accordance.
In 2022, 2023, and 2024 — the number of STRs reported to the authorities there stood at 10,797, 16,076, 19,658.
Over the last few months, South Korean authorities have intensified crackdowns over potentially illegal crypto transactions. Last month, for instance, South Korean prosecutors deepened their investigation into the potential involvement of former President Yoon Suk-yeol and his wife, former First Lady Kim Keon-hee, in a crypto fraud case linked to luxury car collector, Jon Bur Kim.
Earlier this month, South Korean dismantled an international hacking syndicate responsible for stealing roughly $28 million or 39 billion Korean won from crypto and bank accounts of the nation’s wealthy elite.