South Korea's AI-Driven Global Crackdown on Crypto-Powered Drug Networks

South Korea’s prosecution service has expanded its Dark Web Special Investigation Team to combat the rising threat of crypto-powered drug crimes, with a new focus on broader online distribution channels. The unit, which previously concentrated on the dark web, now includes district offices in Suwon and Daegu, reflecting a nationwide effort to address illicit activities. Prosecutors have identified approximately 10,000 dark web sites and 3,000 Telegram channels as key targets for investigation. The initiative also involves deploying AI tools to monitor online drug transactions and advertisements, marking a technological shift in enforcement strategies South Korea Revamps Anti-Crypto-powered Drug Crime Force^[1].

Collaboration with overseas platforms and crypto exchanges has been prioritized, as domestic agencies face jurisdictional limitations in shutting down international drug distribution networks. The prosecution service plans to work with entities like Telegram, Google, Apple, and Meta to analyze cryptoasset flows, while also seeking partnerships with overseas-based exchanges to track transactions linked to drug sales. This cross-border cooperation aims to address the challenge of law enforcement’s limited reach in countries where these platforms are headquartered South Korea Revamps Anti-Crypto-powered Drug Crime Force^[1].

The surge in crypto-related drug crimes has been attributed to the adaptability of criminal networks. Prosecutors note that dealers are increasingly using tools to delete transaction data and employ intermediaries for smuggling and "dead-dropping" drugs to buyers. Additionally, some kingpins evade capture by relocating overseas before launching their operations. The use of crypto as a payment method has further complicated investigations, as it enables anonymous and cross-border transactions South Korea Revamps Anti-Crypto-powered Drug Crime Force^[1].

Data from the Financial Intelligence Unit (FIU) highlights the scale of the issue, with over 36,684 suspicious virtual asset transactions reported in South Korea by August 2025—surpassing the combined totals of the previous two years. Stablecoins, particularly USDT, have been central to illicit remittance schemes, with one case involving the illegal transfer of 57.1 billion won (approximately $41 million) through cross-border channels. These trends underscore the urgency for enhanced regulatory frameworks and technological safeguards .

To address the growing complexity of crypto crimes, South Korea has established a permanent Joint Investigation Unit (JIU) for Virtual Asset Crimes. Launched in 2025, the unit has already indicted 74 individuals and arrested 25 suspects since its inception. It operates under the Seoul Southern District Prosecutors’ Office and includes 34 prosecutors and 11 financial regulators. The JIU’s mandate extends to high-profile cases, such as the investigation of the alleged fraudulent coin Queenbee, and emphasizes the need for specialized expertise in handling digital asset-related offenses .

The government’s strategy also targets younger offenders, as 60% of drug crimes in 2024 were committed by individuals under 40. Prosecutors attribute this trend to younger generations’ familiarity with online transaction methods and crypto, compared to older offenders who prefer in-person cash deals. The unit has also expanded its focus to include the misuse of medical drugs, reflecting a broader approach to addressing illicit activities enabled by digital assets South Korea Revamps Anti-Crypto-powered Drug Crime Force^[1].

South Korea’s regulatory environment is further evolving to counter crypto crimes. The Virtual Asset User Protection Act, effective since July 2024, has imposed stricter licensing and reporting requirements on exchanges. Meanwhile, the government is considering aligning its stablecoin regulations with the U.S. GENIUS Act to harmonize cross-border financial norms. These measures aim to balance innovation with oversight, ensuring that South Korea remains a hub for crypto adoption while mitigating risks associated with illicit trade .