South Korea arrests 23 in $11M USDT laundering tied to Cambodia scam rings

South Korean police dismantled a $11.1 million USDT money laundering network tied to a Cambodia-based phishing operation.

South Korean police arrested 23 people accused of laundering $11.1 million through Tether's USDT stablecoin for a Cambodia-based phishing ring, the Seoul Metropolitan Police Agency said June 16.

"The scam-compound ecosystem in Southeast Asia remains a persistent concern despite years of enforcement," Xue Yin Peh, head of investigative strategy and collections for APAC at Chainalysis, said. "Transnational criminal networks have demonstrated significant flexibility and resilience."

The group moved about $11.1 million (16.8 billion won) between February 2024 and April 2025 by buying USDT, bouncing it between domestic and overseas exchanges, then cashing out into foreign currency or won for a fee, police said. A review of more than 11,300 linked accounts uncovered 265 instances of phishing harm — spanning voice phishing and investment fraud — worth $17 million (25.7 billion won). Two suspects identified as A and B were detained, while the alleged ringleader, identified as C, remains at large and is now subject to an Interpol Red Notice.

The case shows the challenge regulators face as stablecoins like USDT remain the preferred vehicle for illicit flows. "Criminals use them for largely the same reasons legitimate users do: liquidity, portability, and relative price stability," Peh said. The U.S. multi-agency Scam Center Strike Force has frozen, seized, or forfeited more than $580 million in crypto tied to networks operating out of Burma, Cambodia, and Laos since its launch in November.

In a parallel case, police in Seoul arrested 11 additional suspects — eight of them detained — for laundering 3.5 billion won from the same Cambodian phishing network using a gift certificate company as a front. The gang operated a five-tier division of labor, taking 15 percent of laundered proceeds as fees, and communicated exclusively via Telegram with auto-deleted chat histories, police said. Investigators seized 593.5 million won in cash and two luxury watches worth 200 million won.

Stablecoins such as USDT offer transparency advantages despite their role in illicit finance. "On-chain transactions stay transparent and traceable," Peh said, noting that issuers can freeze funds once illicit use surfaces. She argued that stablecoin issuers should be part of the "fraud-prevention front line" and that clearer legal frameworks are needed to help issuers, exchanges, banks, and authorities coordinate when victim funds are at risk.

Cambodia in April advanced its toughest anti-scam law yet by royal decree, threatening compound bosses with up to life in prison, though analysts cautioned the measure may push operations across borders rather than end them. Interpol branded scam-compound networks a global transnational threat in November, and Taiwanese prosecutors charged 62 people over links to the network of Cambodian tycoon Chen Zhi, who was extradited to China earlier this year.

This article is for informational purposes only and does not constitute investment advice.