Last year, a seismic shift occurred in the cryptocurrency landscape, specifically between South Korea and Cambodia that’s sending shockwaves through regulatory circles. Transfers of digital currencies surged an astonishing 1,400%, reaching a staggering $8.9 million in 2024. This spike raises eyebrows not only for its magnitude but also for the ominous shadows it casts over potential links to illicit activities.
The spotlight is on Huione Guarantee, a firm based in Cambodia that has been linked to various nefarious activities, including fraud and human trafficking. The US and UK governments have placed sanctions on its parent company, Huione Group, suspecting it of serving as a financial lifeline for cybercriminals. In response to these alarming developments, all five of South Korea’s leading exchanges—Upbit, Bithumb, Coinone, Korbit, and Gopax—have suspended transactions with Huione, reflecting a growing commitment to combatting money laundering.
According to data from the Financial Supervisory Service (FSS), shared by opposition lawmaker Rep. Lee Yang-soo, the figure for transfers between South Korean exchanges and Huione Guarantee skyrocketed to 12.8 billion won ($8.9 million) from a mere 9.22 million won the previous year. Bithumb saw the most significant exposure, as its transactions leaped from 9.22 million won to an eye-popping 12.4 billion won. Meanwhile, Upbit, which had not previously dealt with Huione, recorded an influx of 366.9 million won in transactions. The troubling trend shows no signs of slowing down; by October 20 of this year, total transactions had already reached 3.15 billion won.
Today, OFAC and FinCEN, with UK’s FCDO, designated the Prince Group TCO and 146 associates, while Huione Group was named under Section 311 of the USA PATRIOT Act. DOJ also seized a record $15B in bitcoin linked to these Southeast Asian crypto scam operations. Read more here:… pic.twitter.com/MgjkMFmCbl— Chainalysis (@chainalysis) October 14, 2025
The bulk of these cross-border transactions were conducted using Tether (USDT), a stablecoin that has become a favorite for international remittances due to its liquidity and ease of conversion. South Korean authorities have responded decisively, with Upbit’s operator, Dunamu, quickly reporting Huione to regulators upon detecting suspicious transactions and addressing linked wallets. Following Upbit’s lead, Bithumb blocked all deposits and withdrawals associated with Huione. The underlying motivation? A firm commitment to uphold the integrity of the crypto ecosystem in South Korea amid growing threats.
As if this weren’t enough, revelations have emerged about the Cambodian branches of four major South Korean banks—Jeonbuk Bank, KB Kookmin Bank, Shinhan Bank, and Woori Bank. These banks paid a whopping 1.45 billion won in interest to the Prince Group, another Cambodian entity under scrutiny for potential financial crimes. The Financial Services Commission (FSC), led by Chairman Lee Eog-weon, has vowed to intensify oversight by implementing preemptive account freezes and stricter anti-money laundering (AML) controls.
In a parallel turn of events, South Korean retail investors have continued to delve into U.S. technology and cryptocurrency markets. During the Chuseok holiday, which saw local markets close from October 3 to 9, savvy investors funneled a tremendous $1.24 billion into U.S. tech and crypto-linked assets. This energetic trading spree was predominantly focused on leveraged ETFs and high-growth stocks, spurred by optimism around Wall Street’s resilience and local government stimulus initiatives.
Notable purchases included substantial investments in popular assets like the Direxion Daily Tesla Bull 2X ETF, Iris Energy, Meta Platforms, and Tesla itself. However, this buying enthusiasm met a swift decline due to rising tensions between the U.S. and China, leading to a global market pullback that wiped out significant gains.
Meanwhile, as part of ongoing efforts to regulate the burgeoning digital asset sector, South Korea’s financial watchdog imposed temporary restrictions on crypto lending practices, suspending all lending services until a robust regulatory framework is enacted.
As the dust settles, one thing is clear: the intersection of cryptocurrency and crime is drawing increased scrutiny from regulators around the globe. The coming months will be critical as these institutions work diligently to enforce stricter measures that safeguard not only their markets but also the integrity of the financial systems at large.
As developments continue to unfold, will South Korea emerge as a leader in crypto regulation, or will it be seen as a hotspot for illicit activity? Stay tuned as we unravel these stories and provide insights into the ever-evolving world of cryptocurrency.