- South Korea’s customs agency said the scale of crypto-linked illegal remittances uncovered over the past five years exceeded 10 trillion won ($7.2 billion).
- It said 83%% of the illegal remittance methods detected used crypto assets, and more than 90%% of those involved Tether (USDT) and other stablecoins.
- Crypto-based illegal remittances are spreading into physical transactions such as gold smuggling and used-car smuggling, suggesting the actual scale may be larger than official detection data.
Forecast Trend Report by Period
Crypto-linked illegal foreign-exchange transactions uncovered by South Korea’s customs authorities topped 10 trillion won ($7.2 billion) over the past five years, driven by the spread of over-the-counter settlements using stablecoins such as Tether’s USDT. More recently, authorities have also found such schemes being used in physical transactions involving gold and used cars.
Data submitted by the Korea Customs Service to the office of Democratic Party lawmaker Chung Il-young showed 71 crypto-linked illegal foreign-exchange cases were detected from 2021 through March 2026. The amount involved surged to 4.7566 trillion won ($3.43 billion) in 2022 from 823.8 billion won ($594 million) in 2021. The number of cases increased to 16 last year from 10 in 2021.
In the past, such schemes typically involved accounts in two countries and unregistered foreign-exchange trading tied to illegal transfers or price arbitrage between domestic and overseas markets. More recently, the method has evolved: a broker who receives cash abroad sends crypto assets to an operator in South Korea, who then converts them into won through an exchange or over-the-counter trade and delivers the money to the recipient. Because the transactions bypass banks, no normal foreign-exchange remittance record is created.
Tether, which is pegged to the dollar, has become a widely used tool in these schemes. The Korea Customs Service said 83% of illegal remittance methods detected over the past five years involved crypto assets, and more than 90% of those used stablecoins.
Crypto-based illegal remittances are also spreading into trade in physical goods, including gold and used cars. The customs agency said 89 gold smuggling cases were detected in South Korea from 2021 through 2026. Many involved shipments diverted to Japan, where gold prices were relatively higher than in South Korea, with Tether used to settle the payments.
Used-car export proceeds have also become a channel for crypto-based illegal remittances. On May 11, prosecutors referred two Kyrgyz nationals and two South Korean distributors of so-called ghost cars on allegations they tried to smuggle 13 high-end vehicles, including Mercedes-Benz models, to Kyrgyzstan using Tether and other cryptocurrencies. Authorities believe they exploited the difficulty of externally verifying vehicle histories in the used-car market.
The actual scale of crypto-linked illegal remittances may exceed official detection data. So-called hand-to-hand transactions that bypass exchanges, as well as indirect transfers using personal wallets, are difficult for authorities to track in real time.
Choi Young-chong, Korea Economic Daily reporter, youngchoi@hankyung.com
