South Korean Court Jails Two Vietnamese for USDT Money Laundering

A South Korean court has sentenced two Vietnamese nationals to two years in prison each for their involvement in a cross-border money laundering scheme that utilized Tether (USDT). The defendants, a 23-year-old college student surnamed Duong and an unemployed individual also named Pham, were found guilty of violating the Special Act on Prevention of Telecommunications and Financial Fraud and Refund of Damages.

The scheme involved the duo receiving proceeds from voice phishing scams in Korean won, which they then converted into USDT and transferred to a crypto wallet held by a member of the voice phishing gang residing in Vietnam. The ring paid the defendants commission fees ranging from 50,000 won to 100,000 won for every 10 million won worth of USDT sent.

The voice phishing ring operated by impersonating various officials, including credit card delivery workers, insurance company employees, National Tax Service staffers, and public prosecutors. They would contact potential victims, often claiming to check the safety of their bank accounts, and dupe them into making cash transfers.

The court noted that while the defendants did not orchestrate the crime, their role as intermediaries was crucial. The judge emphasized the need for severe punishment, stating that the defendants had not made any efforts to compensate the victims for the damages incurred. The court also highlighted the rising trend of USDT-related crimes in South Korea, with an increase in bogus USDT-themed over-the-counter deals and related thefts.

This case underscores the growing concern over the use of cryptocurrencies in illicit activities. The popularity of USDT in South Korea has made it a target for criminal elements, who exploit its stability and ease of transfer to launder funds. The sentencing of Duong and Pham serves as a warning to others involved in similar activities, demonstrating the legal consequences of participating in such schemes.

The case also highlights the challenges faced by law enforcement in combating cross-border financial crimes. The use of cryptocurrencies complicates investigations, as funds can be transferred quickly and anonymously across international borders. This requires coordinated efforts between different jurisdictions to effectively track and prosecute those involved in such activities.

In response to the increasing threat of financial fraud, South Korea has been strengthening its legal framework to combat telecommunications and financial crimes. The Special Act on Prevention of Telecommunications and Financial Fraud and Refund of Damages aims to protect victims and hold perpetrators accountable. The sentencing of Duong and Pham is a step towards achieving this goal, sending a clear message that such crimes will not be tolerated.