The Hwanchigi method accounts for $6.4 billion out of $7.1 billion in illegal crypto transactions recorded in South Korea since 2021, exploiting cryptocurrency transfers to move illicit funds offshore without touching the regulated banking system. Money laundering cases involving virtual assets reached 1,214 in the first half of 2026 alone, up from just 8 cases throughout 2025, representing a 152-fold increase. Despite this surge, police made only 18 arrests for crypto money laundering in H1 2026, compared to 42 in all of 2023, highlighting a growing enforcement gap. The Korea Customs Service seized 7.2 trillion won ($4.92 billion) in illegal foreign exchange transactions in H1 2026, with over 90% of crypto-linked crime running through unlicensed channels beyond domestic jurisdiction.
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