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Crypto transfers between Korean, Cambodian exchanges surge amid crime concerns
A minibus is parked in front of a luxury residence in Phnom Penh, Cambodia, Sunday (local time), where Koreans are believed to be confined. Yonhap
By Jun Ji-hye
Korean banks paid $1 mil. in interest to Cambodian firm linked to criminal network
Cryptocurrency trading between Korean and Cambodian exchanges saw a sharp increase last year, according to data from the Financial Supervisory Service (FSS) Monday.
This surge raises concerns that domestic exchanges may have been exploited for money laundering or illicit overseas transfers involving Cambodian criminal groups, amid reports of transnational online scam-related crimes proliferating in the Southeast Asian country, which have exploited and victimized some Koreans.
In response, domestic exchanges have suspended all transactions with the Cambodian platform.
Data from the FSS obtained by Rep. Lee Yang-soo of the main opposition People Power Party (PPP) showed that cryptocurrency transfers between Korea’s five major exchanges — Upbit, Bithumb, Coinone, Korbit and Gopax — and Cambodia’s Huione Guarantee totaled 12.8 billion won ($8.9 million) last year, surging nearly 1,400 times from 9.22 million won in 2023.
Huione Group, a Phnom Penh-based financial conglomerate, has been sanctioned by the U.S. and U.K. governments as a transnational criminal network for allegedly laundering digital assets obtained through fraud and theft. Huione Guarantee, the group’s virtual asset platform, is believed to serve as a key conduit for high-risk fund transfers.
By exchange, transactions between Bithumb and Huione Guarantee skyrocketed from 9.22 million won in 2023 to 12.4 billion won last year.
Upbit, which recorded no such transactions in 2023, posted 366.9 million won in inflows and outflows with the Cambodian firm.
Large-scale transfers of coins between domestic exchanges and Huione Guarantee have persisted into this year.
Between January and Oct. 20, the total volume of coins exchanged through the nation’s five platforms reached 3.15 billion won. While down from last year, this remains far above the 2023 level.
The majority of transfers between Korean and Cambodian exchanges were made in Tether (USDT), a stablecoin pegged to the U.S. dollar. Given its one-to-one link with the dollar, as well as its stability and ease of conversion, Tether appears to have been widely used as a convenient channel for cross-border remittances.
In response to the recent rise in crimes in Cambodia, Korean exchanges have begun tightening security measures.
Dunamu, the operator of Korea’s largest cryptocurrency exchange Upbit, reported Huione to financial authorities earlier this year after detecting potential money-laundering activity.
The Korean company subsequently identified wallets connected to Huione and imposed a complete ban on all crypto transfers involving the exchange.
Bithumb, which had the largest transaction volume, also blocked all Huione-related crypto deposits and withdrawals on May 2.
Meanwhile, FSS data also showed that Cambodian branches of four Korean banks — Jeonbuk Bank, KB Kookmin Bank, Shinhan Bank and Woori Bank — together paid a total of 1.45 billion won in deposit interest to Prince Group, a Cambodian company suspected to be linked to criminal activity.
The data submitted to Rep. Kang Min-kuk of the PPP showed that Jeonbuk Bank paid the largest share at 709 million won, followed by KB Kookmin Bank at 673 million won.
Currently, these banks hold a combined total of 91 billion won in Prince Group deposits, which have been frozen under international sanctions.
Kang suggested that criminal organizations operating in Cambodia may have used the Korean banks’ local branches to launder illicit funds and urged financial authorities to conduct a thorough investigation.
“Since some of the banks engaging with Cambodian criminal groups are partnered with cryptocurrency exchanges, a comprehensive probe into possible money laundering is essential,” Kang said.
Financial Supervisory Service Gov. Lee Chan-jin, left, speaks to Financial Services Commission Chairman Lee Eog-weon during a National Assembly audit in Seoul, Monday. Yonhap
In response, Lee Eog-weon, chairman of the Financial Services Commission, Korea's top financial regulator, pledged to introduce preemptive account freezes targeting the proceeds of Cambodian criminal groups and enhance the existing supervisory framework.
“We will quickly designate individuals and entities subject to restrictions on financial transactions under the Anti-Money Laundering Act in coordination with the Ministry of Foreign Affairs,” Lee said during a National Assembly audit.
Financial Supervisory Service Gov. Lee Chan-jin noted the lack of a direct oversight system for Korean banks’ overseas branches.
“We will rapidly prepare legislative measures to address this gap and implement them immediately in line with government directives,” he said.