Two separate South Korean courts have handed down prison sentences to individuals involved in major cryptocurrency fraud and money laundering schemes, highlighting the country's ongoing struggle with crypto-related crime.
In the first case, the Daegu District Court sentenced the 41-year-old head of an illegal crypto exchange to five years in prison for laundering $1 million for an overseas voice phishing ring using Tether's USDT stablecoin. A 35-year-old employee of the exchange received a sentence of two years and eight months. Presiding Judge Lee Young-cheol noted the court considered the defendants' lack of effort to restore damages to victims who suffered "extreme hardship." Prosecutors detailed that the criminals, posing as law enforcement or family members, tricked victims into wiring money to bank accounts controlled by the exchange. The funds were then quickly withdrawn as cash and converted to USDT via private transfers, a process so swift that victims' accounts could not be frozen in time.
The second case, adjudicated by the Incheon District Court, involved a larger-scale fraud totaling $5.4 million (₩8 billion) from over 150 victims. The main ringleader, referred to as the "team leader," was sentenced to four years in prison, while another leader received 18 months. An additional 28 network members received sentences ranging from six months to 2.5 years. Victims and their lawyer, Kim Kyung-nam, criticized the sentences as lenient, arguing the crimes were well-planned and deserved harsher punishment of four to seven years. The court defended its ruling, stating many members were unaware of the full scope of the crimes when recruited and that the ringleaders coerced them. The fraud involved selling victims counterfeit or unlisted "scam coins" with false promises of future profits before laundering the proceeds.
These cases occur against a backdrop of surging crypto crime in South Korea. Financial regulators reported a 54% year-on-year spike in suspicious crypto transactions in 2024, with 36,684 suspicious transaction reports filed in just the first eight months of 2025—a number exceeding the combined total of the previous two years. Lawmaker Jin Sung-joon has urged regulators to develop systematic measures to combat the growing misuse of stablecoins like USDT in foreign exchange crimes.
