South Korea Seizes $3.2 Million in Cryptocurrency from Illegal Exchanges

South Korean authorities have taken decisive action against illegal cryptocurrency operations, seizing approximately 4.4 billion won (around $3.2 million) worth of cryptocurrency from fake crypto exchanges. This operation targeted a syndicate that had been running fraudulent foreign crypto exchanges, collecting hundreds of billions of won from unsuspecting users. The police arrested two crypto exchange firms and three operators, charging them with violations of the Foreign Exchange Transactions Act and the Electronic Financial Transactions Act.

The authorities conducted a thorough investigation, tracking accounts and virtual assets, and eventually seized the cryptocurrency held in the suspects' wallets. The confiscated assets included $3.2 million in Ethereum (ETH), which the suspects had attempted to launder to evade detection. The group had been operating these illegal exchanges for the past six years, manually exchanging funds through a separate platform called Nettel Pay.

The investigation revealed that three unregistered money changers had transacted a total of 943.4 billion won using cryptocurrency exchange fraud techniques. The group managed to raise approximately 25.7 billion won (around $18.92 million) from platform fees alone. The funds received from victims were converted into Nettel Pay and used on overseas gambling sites, prompting further investigation by the prosecution.

This operation underscores the growing concern over cryptocurrency-related fraud and the need for stringent regulatory measures. In February, South Korean prosecutors established a dedicated joint investigation unit for crimes related to virtual assets, comprising prosecutors and financial regulators from the Financial Services Commission and the Financial Supervisory Service. This unit aims to enhance the enforcement of laws and regulations governing cryptocurrency transactions, ensuring greater protection for investors and the financial system as a whole.