"Illegal Foreign Exchange Transaction Gang Involved in 26 Billion Won Virtual Asset Funding Including Overseas Gambling Arrested"

A group involved in illegal foreign exchange transactions using virtual assets, who embezzled approximately 26 billion KRW in overseas gambling funds, was apprehended by customs authorities.

The Seoul Customs Office of the Korea Customs Service announced on the 5th that it had uncovered nine members of a hawala organization violating the Foreign Exchange Transactions Act and sent them to the Seoul Central District Prosecutors' Office.

Provided by Korea Customs Service

Among the members, the ringleader Mr. A was sent to detention on the 21st of last month, while six accomplices were sent without detention. Two others have fled overseas and are currently wanted.

The group operated secret offices in Seoul and Bonifacio, Philippines, and were found to have acted as agents for illegal overseas casinos.

In casinos, agents are responsible for soliciting customers to VIP ROOMS (commonly called Jeongkit rooms) and collecting commissions (known as rolling fees) from these rooms.

In particular, Mr. A and others are accused of receiving cash (in Korean won) from individuals who enjoy overseas gambling, then remitting an equivalent amount of virtual assets (Tether coins) to casinos in the Philippines, where the funds were withdrawn in local currency and delivered, effectively hawala-ing approximately 16 billion KRW.

Hawala refers to methods that effect the payment and receipt of foreign currency between Korea and abroad without going through foreign exchange banks, constituting unregistered foreign exchange business.

Seoul Customs confirmed that besides hawala-ing illegal gambling funds, Mr. A and others also committed additional crimes aimed at arbitrage trading of virtual assets.

Books and bundles of cash seized during the crackdown on an offshore gambling fund laundering organization. Provided by Seoul Customs, Korea Customs Service

During the investigation, it was revealed that they illegally remitted foreign currency worth approximately 9.6 billion KRW by submitting false invoices to banks under the names of multiple shell companies.

These false invoices were created to fabricate the appearance of payment for imports despite no actual import transactions.

Seoul Customs discovered the illegal foreign exchange transaction suspicions of the organization led by Mr. A during a focused investigation of illegal currency exchange offices, and proved the charges through a 10-month undercover investigation and analysis of seized materials.

Additionally, during a search of the secret offices, they seized further materials related to illegal remittances, prostitution ledgers, and cash amounting to approximately 240 million KRW in criminal proceeds.

A Seoul Customs official stated, “This case is the first to uncover a domestic currency exchange office and overseas-linked criminal organization illegally remitting overseas gambling funds using virtual assets,” and added, “Seoul Customs will continue to strengthen cooperation and crackdowns with the prosecution, the Financial Intelligence Unit, and others to prevent currency exchange offices from being exploited as money laundering channels for various criminal funds.”

This content was produced with the assistance of AI translation services.