South Korea flags payment firms linked to illegal gambling
South Korea’s Financial Supervisory Service (FSS) has uncovered a network of payment gateway (PG) companies that facilitated criminal transactions tied to illegal gambling, drugs, and voice phishing. According to a local media report, six PG companies were found to have supported criminal operations by providing digital infrastructure and virtual accounts used in illicit activities.
The report stated that the findings were derived from the FSS’s ongoing monitoring of transaction data from PG firms. Authorities detected patterns suggestive of illegal activity through monthly analyses of account histories. Based on this, the FSS conducted on-site inspections at six companies showing irregularities.
These firms allegedly helped criminal organisations collect and transfer funds by offering virtual accounts under the guise of legitimate e-commerce partnerships. In some cases, the PG companies recruited and managed criminal operators directly to increase their transaction volume and fees.
Firms used fake merchants and ghost corporations
Among the identified offenders, one company provided virtual accounts to organisations behind voice phishing scams and illegal betting platforms, which were disguised as online shopping sites. These accounts were used to move proceeds from gambling and fraudulent activity. In return, the PG firm collected large commissions from the transactions.
The same company was also found to have supported operations by covering up complaints of fraud. When reports surfaced from victims, the PG firm allegedly registered fake businesses to deflect investigations and avoid account suspensions.
In another case, a separate PG company created shell firms in the name of its CEO and manipulated card sales data. False sales records were used to secure loans from an online peer-to-peer lending company. The funds from these loans were then embezzled.
A third PG company entered into contracts with an investment scam ring posing as a legitimate business. This allowed fraudulent actors to funnel victim deposits through the company’s virtual accounts, again under the cover of regular e-commerce transactions.
Watchdog refers cases for prosecution, plans tighter controls
The FSS has referred the most serious cases to prosecutors. In one instance, the head of a PG company was sentenced to 30 years in prison and fined KRW40.8 billion ($29.6 million) after being found guilty of embezzlement and fraud involving manipulated transaction data.
Authorities plan to impose additional sanctions on all firms found in violation of the Electronic Financial Transactions Act. This includes potential license revocations and financial penalties.
Government eyes legal reforms amid rising threats
The FSS has also called for stronger legislative tools in response to the scale and complexity of the abuses. According to the local media report, the agency aims to work with government officials to close existing regulatory gaps, including those exploited by digital gambling operators and fraudsters using PG services.
South Korea has kept strict limits on gambling, with most forms of betting illegal except for horse racing, lottery, and the High1 바카라, the only venue that accepts local patrons. Despite this, illegal gambling networks have become more technologically sophisticated, often operating behind fake e-commerce platforms or unregistered entities.
