South Korea Crypto Giants Halt $8.9M Laundering Spree via Sanctioned Cambodian Firm

Upbit, South Korea's largest cryptocurrency exchange, has joined other local platforms in suspending transactions with Cambodia's Huione Guarantee, a platform linked to transnational criminal networks, as regulators intensify scrutiny over money laundering risks. Data from the Financial Supervisory Service (FSS) shows crypto transfers between Korean exchanges and Huione Guarantee surged 1,400-fold to $8.9 million in 2024, prompting all five major Korean exchanges-including Upbit, Bithumb, and Coinone-to halt dealings with the Cambodian firm. The move follows sanctions against Huione Group, Huione Guarantee's parent company, by the U.S. and U.K. governments for allegedly laundering funds tied to fraud, cybercrime, and human trafficking, according to a Yahoo Finance report.

The FSS data, obtained by opposition lawmaker Rep. Lee Yang-soo, highlights a dramatic spike in cross-border transactions. In 2024, transfers totaled 12.8 billion won ($8.9 million), up from just 9.22 million won the previous year. Bithumb reported the largest exposure, with transactions jumping to 12.4 billion won from 9.22 million won in 2023. Upbit, which had no prior dealings with Huione, recorded 366.9 million won in inflows and outflows. The activity has continued into 2025, reaching 3.15 billion won as of October 20, the report noted. Most transfers were conducted in Tether (USDT), a stablecoin favored for its liquidity and ease of conversion in cross-border transactions.

Huione Group's virtual asset arm is suspected of serving as a financial conduit for criminal networks operating in Southeast Asia. The U.S. Treasury and UK authorities have designated the firm for its alleged role in laundering digital assets linked to illicit activities. South Korean regulators responded swiftly: Upbit's operator, Dunamu, reported Huione to authorities after detecting suspicious transactions and imposed a full transfer ban. Bithumb followed suit, blocking all Huione-related deposits and withdrawals in May 2025, the Yahoo Finance piece added.

The surge has raised alarms among lawmakers and regulators about vulnerabilities in the crypto ecosystem. The FSS has tightened anti-money laundering (AML) oversight, requiring exchanges to enhance due diligence on cross-border partners. Opposition figures have called for stricter penalties for non-compliance, emphasizing the need to prevent South Korea from becoming a hub for illicit finance. Meanwhile, Huione Group has denied the allegations, though its statements have since been removed from its website, the report said.