South Korean customs authorities say they’ve dismantled an international “underground remittance” operation that allegedly moved nearly 148.9 billion won (about $101.7 million) through cryptocurrency over roughly four years — using Chinese payment apps WeChat Pay and Alipay as the front end, then routing funds through overseas exchanges and crypto wallets in South Korea before cashing out to local bank accounts.
The case is the latest reminder that crypto doesn’t need a Hollywood-style hack to become part of a money laundering pipeline. Sometimes the “innovation” is simply combining familiar tools — mobile payments, multiple exchange accounts, and lots of small transfers — in a way that’s hard for traditional monitoring systems to see end-to-end.
What authorities allege happened
According to the Korea Customs Service (KCS), three suspects were referred to prosecutors for alleged violations of South Korea’s Foreign Exchange Transactions Act after investigators traced suspicious cross-border flows tied to digital assets.
The alleged scheme ran from September 2021 to June 2025, with suspects accused of exploiting both domestic and overseas crypto accounts alongside multiple Korean bank accounts to move funds and obscure the trail.
Local reporting identified the suspects as a Chinese national (31), a naturalized Chinese citizen (40), and a South Korean national (44) — a trio that, investigators say, helped the network scale and operate across different on-ramps and off-ramps.
WeChat Pay, Alipay and crypto wallets
The alleged flow looked like this:
- Collect funds via WeChat Pay/Alipay
Customs officials say customers deposited money through apps such as WeChat Pay and Alipay. - Buy crypto abroad
Investigators say the suspects purchased virtual assets in multiple countries, then sent the crypto into Korean wallets. - Cash out in South Korea
After the crypto arrived, it was allegedly sold for Korean won, then distributed through cash withdrawals or bank transfers across numerous domestic accounts.
Authorities also say the group hid the transfers behind plausible real-world purposes — including cosmetic surgery fees and overseas tuition payments — which can blend into legitimate cross-border spending patterns.
A medical-tourism angle
One detail that jumped out in local coverage: the naturalized Chinese suspect allegedly worked as a consultation manager at a large plastic surgery clinic, and investigators believe he promoted “remittance help” to foreign clients, collected funds through WeChat Pay/Alipay, and delivered cash to the hospital.
That matters because South Korea’s medical tourism market is real — and so are legitimate payments from overseas patients. But customs officials argue the alleged network used that normal demand as camouflage, turning routine-sounding transactions into cover for a much larger crypto-based remittance ring.
How the operation scaled up
Authorities say the group didn’t stay small. By 2024, after early profits, they allegedly brought in another associate and expanded the operation, opening additional crypto accounts, bank accounts, phones and one-time password (OTP) tools to manage the increased volume and reduce detection risk.
This kind of “account sprawl” is common in crypto crime investigations: the goal isn’t to make the blockchain invisible (it isn’t), but to make attribution and coordination harder by spreading activity across many endpoints.
Why this case matters for South Korea
South Korea has been tightening oversight of digital assets for years, but cases like this highlight a specific pain point: cross-border flows that start outside the banking system (mobile payments) and end outside the banking system (crypto), before finally re-entering local fiat rails.
Cointelegraph’s report noted South Korean regulators are also looking at expanding anti-money laundering controls for smaller transactions — a policy direction aimed at stopping criminals from splitting transfers into bite-sized pieces to avoid red flags.
One widely reported proposal would broaden “Travel Rule” style data collection requirements, pushing exchanges to capture sender/receiver information for transfers below 1 million won (about $680) as well.
In other words: if investigators believe “smurfing” is part of the playbook, the regulatory response is to reduce the benefit of staying small.
Final Words
Customs authorities say the suspects were sent to prosecutors, and additional scrutiny could extend beyond operators to users who relied on illegal money-changing services, according to local reporting.
For everyday crypto users, the takeaway isn’t that “all remittances are suspicious.” It’s that regulators are watching the seams — where payment apps, exchanges, and wallets meet — and the compliance bar is rising fast. If you’re moving funds internationally, the safest route is still the boring one: licensed providers, clear documentation, and exchanges that treat AML like a feature, not an afterthought.