South Korea jails two for $1M USDT voice‑phishing laundering scheme

South Korean prosecutors convicted two operators of an illegal crypto exchange for laundering roughly $1 million in Tether USDT to support an overseas voice‑phishing syndicate. The 41‑year‑old ringleader received a five‑year prison term; his employee was sentenced to two years and eight months. According to court filings, criminals contacted the exchange chief via Telegram for about three months and used impersonation (police or relatives) to trick victims into transferring fiat into bank accounts controlled by the illicit exchange. Employees rapidly converted deposits into USDT and moved funds — prosecutors said the entire process often completed within an hour, leaving banks and regulators insufficient time to freeze accounts and recover money. The voice‑phishing operation was based abroad, authorities said. Prosecutors charged the defendants under South Korea’s Special Act on the Prevention of Damage and Refund of Damage from Telecommunications Financial Fraud. Regulators reported a 54% rise in suspicious crypto transactions year‑over‑year, prompting calls from lawmakers and ministers for coordinated action to prevent misuse of stablecoins (notably USDT and USDC) in fraud and illegal remittances. Key takeaways for traders: the case highlights growing regulatory scrutiny on stablecoins and crypto on‑ramps in South Korea, faster laundering methods that outpace account freezes, and increasing enforcement — factors that may influence local liquidity, exchange compliance requirements and policy risk.