Cryptocurrency Transfers Between Exchanges in Korea, Cambodia Skyrocket

Crypto flows between Cambodia’s Huione Guarantee and South Korea’s biggest crypto exchanges soared nearly 1,400-fold in 2024, drawing sharp scrutiny from lawmakers and regulators concerned about possible links to organized crime in Southeast Asia.

Financial Supervisory Service (FSS) data disclosed by opposition legislator Lee Yang-soo shows that transactions between Huione Guarantee and five leading South Korean exchanges, namely Bithumb, Upbit, Coinone, Gopax, and Korbit, amounted to $8.9 million last year. The figure marks an extraordinary leap from only $6,425 in 2023. In response, all five exchanges have now suspended dealings with Huione Guarantee.

The platform is part of the Phnom Penh-based Huione Group, which has been sanctioned by both the United States and the United Kingdom for laundering funds tied to human trafficking, online fraud, and cybercrime. Authorities believe its digital asset operations act as a major financial channel for illicit networks operating across the region.

Among the exchanges, Bithumb saw the sharpest rise in transactions, jumping from $6,425 in 2023 to $8.6 million last year. Upbit, which previously had no interaction with Huione, recorded $255,681 in transfers. The trend has continued into this year, with transaction volume reaching over $2.2 million by October 20. Most of these transfers were in Tether (USDT).

In response, South Korean regulators have tightened their oversight. Dunamu, which operates Upbit, flagged suspicious transactions to regulators, identified related crypto wallets, and imposed a full transfer ban. Bithumb soon followed, blocking all deposits and withdrawals linked to Huione in May.

The FSS also disclosed that Cambodian subsidiaries of four Korean banks, namely Woori Bank, Jeonbuk Bank, Shinhan Bank, and KB Kookmin Bank, paid more than $1 million in interest to Prince Group, another Cambodian company currently under scrutiny for possible financial crimes.

Meanwhile, investors in South Korea showed heightened risk appetite during the Chuseok holiday earlier this month, funneling $1.24 billion into crypto and tech-linked assets as domestic markets remained closed. The buying spree centered on high-growth stocks and leveraged exchange-traded funds, with major purchases including Iris Energy, Tesla, and Meta Platforms.

However, gains were short-lived as renewed China-US trade tensions triggered a global market sell-off, erasing much of the prior week’s momentum.

In a separate move, the FSS in August ordered local exchanges to halt all crypto lending services until a formal regulatory structure is in place, underscoring Seoul’s growing push to bring order to its fast-evolving digital asset market.

As more regulatory authorities around the world tighten their oversight over crypto transactions, legitimate actors like Cantor Equity Partners Inc. (NASDAQ: CEP) will be better positioned to attract investment as risks linked to fraudulent activity are reduced.

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