The value of crypto transactions between South Korea’s five largest cryptocurrency exchanges and the Cambodian-based company Huione Guarantee has surged by nearly 1,400 times in a single year, reaching $8.9 million (12.8 billion won). This astronomical increase has raised fears that global criminal networks may be using South Korea’s financial systems for money laundering.
$8.9 Million in Transactions and the Criminal Network
According to data obtained from the Korean Financial Supervisory Service (FSS) and opposition lawmaker Lee Yang-soo, transactions between the country’s five major crypto exchanges—Upbit, Bithumb, Coinone, Korbit, and Gopax—and Huione Guarantee jumped from a mere 9.22 million won (approx. $6,400) in 2023 to 12.8 billion won ($8.9 million) in 2024.
This shocking increase is compounded by serious suspicions surrounding the Cambodian-based financial firm, Huione Group.
- International Sanctions: The Huione Group has been sanctioned by the US and UK governments on suspicion of laundering digital assets linked to crimes such as fraud, cybercrime, and human trafficking.
- Financial Pipeline: Huione Guarantee, the virtual asset division of the Huione Group, is believed to be acting as a key financial pipeline for these Transnational Criminal Networks operating in Southeast Asia.
- Maximum Impact: Among the exchanges, Bithumb registered the highest transaction volume (12.4 billion won). Even Upbit, whose operator is Dunamu, which had no transactions in 2023, recorded 366.9 million won in transactions. Furthermore, this activity has not ceased in 2025, with 3.15 billion won in transactions occurring up until October 20.
Use of Tether (USDT) and Regulatory Responses
The majority of these illicit transactions occurred using Tether (USDT), a stablecoin pegged to the US Dollar. Due to its stability and ease of cross-border transfer, USDT has become the preferred currency for cybercrime and money laundering activities.
Korean authorities have responded immediately upon identifying this risk:
- Upbit and Bithumb Action: After detecting suspicious transactions, Dunamu, the operator of Upbit, identified Huione-related wallets and imposed a full ban on its transactions. Bithumb, which conducted the excessive trading, also halted all deposits and withdrawals to and from Huione since May 2nd.
- Intensifying Controls: Regulators led by Financial Services Commission Chairman Lee Eog-weon have pledged to implement proactive account freezes and stricter Anti-Money Laundering (AML) controls in the future.
Prince Group Investigation and Korean Bank Connections
Besides crypto exchanges, Korean bank branches in Cambodia have also come under suspicion.
According to data released by the Financial Supervisory Service (FSS), four Korean banks with branches in Cambodia—Jeonbuk Bank, KB Kookmin Bank, Shinhan Bank, and Woori Bank—paid 1.45 billion won in interest to the Prince Group, another Cambodian entity.
The Prince Group is also a major criminal network associated with fraud, cybercrime, human trafficking, and Forced Labor Camps. Earlier this year, the US Treasury Department filed charges against its chairman, Chen Zhi, and imposed sanctions on the group. Following this, Korean banks have frozen approximately 91.2 billion won in deposits belonging to the Prince Group. These events underscore the threat posed by global criminal activities to South Korea’s financial systems in both the crypto and traditional finance sectors.
Impact on the Market
Amidst this turmoil, South Korean retail investors invested $1.24 billion in US tech and crypto-linked assets, even during a local market holiday. However, the market began to decline as US-China trade tensions escalated.
Nevertheless, the Huione affair underscores the necessity for crypto exchanges to further strengthen their AML procedures. Furthermore, the South Korean government ordered local exchanges to suspend crypto lending services to curb risky lending practices in the digital asset sector. Overall, this crypto exchange incident has loudly highlighted to the world the importance of international efforts to regulate and monitor cryptocurrency.
