South Korea First Case of "Cryptocurrency-to-Physical Goods" Money Laundering Scheme: 4 Uzbekistan Nationals Arrested

BlockBeats News, September 1st - Today, the Gwangju Metropolitan Police Agency in South Korea announced that it has arrested and charged four Uzbekistan nationals for allegedly providing funds to the United Nations-designated terrorist organization "Islamic Jihad Union" (KTJ) through cryptocurrency. These four individuals were arrested in April this year on suspicion of violating South Korea's "Act on the Prohibition of Financing for Terrorism," with one of them identified as the ringleader and previously subject to a red notice issued by Interpol.

The police stated that between August 2024 and April 2025, the ringleader transferred a total of 4,267 USDT to the KTJ through seven transactions. Simultaneously, he is also accused of receiving cryptocurrency from KTJ and using the funds to purchase 11 used cars and 2 excavators, with a total value of approximately 170 million South Korean Won (about $121,000), which were then shipped to Syria. Three other suspects are alleged to have assisted in the procurement and export.

The South Korean police mentioned that previous terrorism cases mainly involved one-way transfers of funds to terrorist organizations. However, this case is the first to uncover a "funds circulation pattern: receiving cryptocurrency from a terrorist organization and then returning it in the form of physical goods." The ringleader has denied the main charges, claiming that the funds were used for family living expenses and stating that he was unaware of the actual buyers of the vehicles.