South Korean Police Arrest Ring Accused of Laundering $67.3 Million in Criminal Proceeds Through Digital Assets

South Korean police have arrested a group accused of laundering more than $67 million in fraud proceeds by disguising the funds as payments for gift certificate transactions, then converting them into cash or using them to buy digital assets.

The Hankook Ilbo reported on Sept. 14 that the cyber investigation unit of the Gyeonggi Nambu Provincial Police Agency said it had referred seven suspects to prosecutors in detention, including an alleged ringleader in his 40s identified only as A. They face charges of violating South Korea's law on refunding victims of telecommunications fraud and the law on regulating the concealment of criminal proceeds.

The suspects are accused of setting up shell gift certificate companies at five locations in the Seoul metropolitan area, including Seoul and the Gyeonggi cities of Ansan, Goyang and Siheung, from June last year through February this year. Police said the group laundered 93.4 billion won, equivalent to about $67.3 million.

Investigators said the group was hired by scam rings involved in investment chat rooms and secondhand goods transaction fraud. Money sent by victims moved through multiple layers of accounts before landing in bank accounts belonging to the gift certificate companies run by A and his associates. The funds were then withdrawn in cash or by check, or used to purchase digital assets.

A police official said the group routinely laundered criminal proceeds by disguising them as payments for gift certificate transactions, then withdrawing the money with large checks or using it to buy digital assets.