South Korea to Crack Down on “Tether Laundromats” Used to Launder Stolen Money

Highlights:

• South Korean police are cracking down on illegal crypto shops used to launder stolen money.
• Criminal groups convert stolen cash into Tether to move funds overseas and avoid detection.
• Police will train investigators in crypto tracing and have secured nearly 100 million won in funding.

South Korean police said on Monday that they will take stronger action against “Tether laundromats.” These are illegal crypto exchange shops that are not registered with the authorities. Criminal groups use them to turn stolen money into Tether (USDT). Park Seong-ju, head of the National Investigation Headquarters at the Korean National Police Agency, announced the move during a press briefing in Seoul. He said tracking criminal money is now one of the agency’s main priorities.

“We will prepare specialized training for virtual asset investigations in cooperation with related agencies, including the Financial Intelligence Unit,” Park said. “Investigations have already been conducted on major crimes such as fraud and drug offenses involving virtual assets, and we will make sure to investigate money laundering of criminal proceeds without fail.”

How Criminal Groups Are Using Tether to Move Funds

According to the report, voice phishing groups are among the criminal networks suspected of using these illegal exchange shops. Voice phishing is a type of scam where criminals call victims and trick them into sending money. They take stolen cash to these shops and convert it into Tether, which is linked to the U.S. dollar, so its value stays mostly stable. This makes it easier for criminals to move large amounts of money overseas. 

These exchange shops are not registered with the South Korean financial authorities. They work outside the country’s official financial system. After criminals change the stolen money into Tether and send it abroad, investigators find it very hard to trace.

Police to Train Investigators in Crypto Tracing

Park said the police criminal proceeds tracking unit will start special virtual asset training in the second half of the year. The agency has also secured nearly 100 million Korean won for this training program. “The capability of investigators in charge is critical, so we will continue specialized training on an ongoing basis,” Park added.

The training will help investigators understand crypto transactions better. They will learn how funds move across wallets, exchanges, and blockchain networks. Blockchain transactions are public, but finding the real people behind them is not always easy. Police often need proper tools, legal support, and data from crypto exchanges. South Korean police now want to improve this process. Park said investigators must have strong skills, and professional training will continue. The main goal is to help police track illegal money, even after criminals convert it into stablecoins like Tether.

South Korea is also tightening rules for overseas crypto transfers. On May 8, lawmakers approved changes requiring firms handling cross-border virtual asset transfers to register with the Minister of Economy and Finance. The move adds wider oversight as authorities monitor stablecoin use in foreign exchange activity.

JUST IN: South Korea passes amendments to the Foreign Exchange Transactions Act, adding a register-for-foreign-asset transfers rule for VAs and tightening penalties (up to 1 year prison or 100M KRW fine). This could influence cross-border crypto flows and exchange compliance i… pic.twitter.com/PAq1FChZow

— Bpay News (@bpaynews) May 8, 2026