South Korea’s Surge in Crypto-Crime Reveals Gaps in Anti-Money Laundering Framework

Technical Details with Attribution

• South Korea recorded 36,684 suspicious crypto-transactions flagged in 2025 by its Financial Intelligence Unit — the highest on record. 
• According to Cryptopolitan, crypto crime from South Korea to Cambodia increased by 1,400-fold in the past year, exposing "glaring" AML policy gaps. 
• Many of these flagged transactions involve transfers through unlicensed exchanges or non-standard wallet flows, which challenge existing regulatory monitoring tools.

Analyst Perspectives 

Some analysts see this surge as an important wake-up call: regulators must upgrade surveillance tools, enforce stricter licensing for exchanges, and improve reporting standards to manage systemic risk.

Others warn that unless governance reforms are coupled with better tech / analytics capability (e.g. blockchain-analytics, real-time flagging), the gap between crypto innovation and compliance will continue to widen.

Global Impact Note

This issue isn’t limited to South Korea — many markets in Southeast Asia, Europe, and Latin America may face similar vulnerabilities as crypto usage grows faster than compliance frameworks. Gaps exposed here could inform policy upgrades in other jurisdictions.