South Korean fake crypto exchange rig busted in $694M scam, $3.2M Ethereum seized

South Korean fake crypto exchange rig operations have exploded into the spotlight after law enforcement officials dismantled a massive fraud network processing over $694.5 million in illegal currency transactions.

The South Korean fake crypto exchange rig, which used Neteller Pay and unregistered foreign exchange schemes, reportedly netted millions in hidden commissions and cryptocurrency stashes, prompting one of the country’s most extensive digital asset investigations to date.

The Busan Western District Prosecutors’ Office, in a June 26 statement reported by Yonhap News, confirmed the seizure of $3.2 million worth of Ethereum hidden in personal crypto wallets tied to the ring’s key operators.

Authorities say the fake exchange rig had been active for over six years, between 2019 and 2024.

Neteller Pay used to funnel illicit crypto transactions

The South Korean fake crypto exchange rig funneled billions of Korean won from ordinary citizens through Neteller Pay, an overseas digital payment service often associated with online gambling and FX trading.

Unlike platforms restricted by South Korean regulations, Neteller operates globally, making it a prime tool for crypto fraud indicted two money exchange companies and three operators without detention under charges of violating the Foreign Exchange Transactions Act and the Electronic Financial Transactions Act.

Investigations into five more individuals linked to similar illegal businesses remain ongoing.

“This case underscores how foreign digital payment platforms are being weaponized in sophisticated fraud schemes,” said Park Min-Jae, financial crimes analyst at Korea Blockchain Watch. “The South Korean fake crypto exchange rig wasn’t just about moving money—it was about bypassing every layer of oversight.”

Over $18.9m pocketed in hidden commissions

Authorities allege the South Korean fake crypto exchange rig processed an astounding 943.4 billion won—roughly $694.5 million—through unlicensed operations.

The three unregistered money changers allegedly collected 25.7 billion won (~$18.92 million) in commission fees alone.

Investigators say that operators stored digital assets under false names and used personal wallets to conceal illicit Ethereum holdings, which were tracked and confiscated during the raid.

“Asset concealment through personal wallets is a growing tactic among fraudulent exchanges,” noted Choi Eun-Young, cybersecurity consultant at Seoul-based HANA Tech.

“This case shows how far the South Korean fake crypto exchange rig went to hide the paper trail.”

In the course of the investigation, prosecutors seized approximately 12.4 billion won in assets, including 4.4 billion won ($3.2 million) worth of Ethereum.

The stash was discovered in privately held virtual wallets and was believed to be an attempt by operators to dodge regulatory surveillance.

This development signals the growing role of crypto in underground finance—and reinforces concerns about lax oversight on cross-border platforms like Neteller.

Repeat offenses and the rise of crypto scams in Korea

The South Korean fake crypto exchange rig adds to a growing list of crypto-related criminal cases. Just last month, 28 individuals were arrested in another scheme that defrauded 50 victims of $1.3 million, using fake token listings to lure unsuspecting investors.

Three months earlier, infamous crypto influencer Park “Jonbur Kim”, dubbed the “Coin King,” was arrested on fraud charges just weeks after making bail for a previous scam.

With Neteller Pay operating in over 200 countries and offering support for over 30 cryptocurrencies, its role in the South Korean fake crypto exchange rig raises questions about international cooperation and digital finance loopholes.

“This isn’t just a Korean problem,” said Kim Yoon-Seok, legal advisor at Digital Finance Korea. “The borderless nature of crypto means fraud can thrive anywhere—especially when regulation hasn’t caught up.”

Conclusion: A wake-up call for Korean regulators

The dismantling of the South Korean fake crypto exchange rig marks a turning point in the nation’s battle against digital financial crime.

With growing concerns over unregulated payment gateways and crypto obfuscation, South Korean lawmakers are under pressure to close systemic gaps exploited by fraudulent operators.

Until then, the shadow economy of fake crypto exchanges may continue to thrive, unless bold regulatory and international action follows this landmark crackdown.