- Two South Korean police officers accepted bribes to assist in illegal crypto exchange laundering $186 million.
- The criminal network converted voice-phishing scam proceeds into Tether (USDT) using fraudulent exchanges disguised as gift-certificate stores.
- Authorities seized over $1.1 million in assets, and similar global cases highlight ongoing challenges in regulating crypto-related crimes.
Two South Korean police officers have been indicted for allegedly accepting bribes from illegal crypto exchange operators involved in a massive money-laundering operation. The investigation 45[revealed a complex network tied to voice-phishing scams that laundered $186 million (249.6 billion won). The officers, now removed from their positions, reportedly facilitated criminal activities in exchange for payments, according to prosecutors.
Alleged Bribe Payments and Officer Involvement
The officers, identified as Superintendent “F” and Officer “G,” allegedly received bribes between July 2022 and February 2024. Officer F received around $59,000 (79 million won) from operators of a private crypto exchange. Officer G accepted $7,500 (10 million won) in cash and luxury items during the same period. The officers, in exchange, shared confidential investigative details, assisted in the reputation restoration of accounts, and helped in establishing contacts with various police agencies.
The bribes were associated with a covert network of unauthorized cryptocurrency dealings that masqueraded as licensed gift-card shops. They were eliminated in major traffic locations like Yeoksam-dong. The main goal of the network was to wash the money coming from illegal activities, mainly from voice-phishing scams, and to turn it into Tether’s stablecoin, USDT.
The illicit exchanges were meant to look authentic, with notices to customers regarding voice phishing as one of the indications. Nonetheless, inquiries pointed out the group’s intent to launder money very clearly. The law enforcement agencies found out about the scheme while looking into a voice-phishing case, which resulted in further investigation.
Authorities Seize Assets and Further Investigations
As part of the ongoing investigation, authorities froze illicit assets worth approximately $1.1 million (1.5 billion won). This included $600,000 (800 million won) in USDT. Prosecutors estimate that the group’s criminal activity generated $8.4 million (11.2 billion won) in proceeds, with a large portion of the funds being concealed or spent.
The exposure of this scheme has led to an increased focus on crypto-related money-laundering operations, particularly those involving law enforcement corruption. The case has also sparked concerns about the intersection of illegal activities and law enforcement officials’ roles in the growing crypto sector. This case is not isolated. Worldwide, there have been reported similar corruption cases linked to law enforcement and cryptocurrency money laundering.
In India, for instance, it was discovered that police officers took bribes and then laundered them through cryptocurrency exchanges. In a similar vein, during the investigation of an inactive crypto exchange, the government of Iran was accused of stealing funds. The continuous expansion of crypto exchanges presents a problem of illegal activities for regulators all over the world. South Korea’s case is a warning signal about the necessity of more stringent examinations in the areas of crypto transactions, law enforcement accountability, and regulation.
