South Korea Signs Agreement with Nine Major Credit Card Companies to Prevent "Crypto Money Laundering" - Will It Be More Troublesome for South Koreans to Use U Cards Going Forward?

South Korea’s Financial Supervisory Service (FSS), Customs Service, and the nine major credit card companies have officially signed an MOU to integrate overseas card usage and entry/exit data, fully intercepting illegal currency exchange channels involving cryptocurrencies. Korean users paying with USDT stablecoins via cards (U Cards) abroad may be the first to be cross-checked.

(Background: South Korea plans to ban credit card transactions for deposits into overseas exchanges to prevent cross-border money laundering.)

(Additional info: Comprehensive comparison of the top 10 crypto payment cards (U Cards): application requirements, rates, cashback percentages…)

The Financial Supervisory Service (FSS), Customs Service, nine nationwide credit card companies, and the Credit Finance Association have signed a “Joint Memorandum of Understanding for Cross-Border Crime Fund Interception and Cooperative Response” (MOU). The core goal is to cut off illegal currency exchange and fund transfers using cryptocurrencies at the source.

According to MBC reports, this signing covers almost all major card issuers in Korea, including Shinhan Card, KB Kookmin Card, Woori Card, Lotte Card, Hana Card, Samsung Card, Hyundai Card, BC Card, and Nonghyup Card.

The Credit Finance Association will serve as the central coordinator for information sharing and will regularly operate practical agreement mechanisms.

Strengthening Crypto Money Laundering and Card Fraud Prevention

A key breakthrough of the MOU is data integration. Under the agreement, all parties will link and analyze usage records of overseas credit and debit cards with entry/exit data to identify and intercept suspicious transactions related to voice phishing (Vishing) and crypto crimes.

Previously, Customs and each card issuer held independent information, limiting anomaly detection. A suspect could split transactions across multiple banks to evade risk controls, creating gaps in supervision. After signing the MOU, data silos will be broken down, greatly enhancing cross-institution comparison capabilities.

This cooperation was triggered by Customs’ recent bust of a major case involving over 1.489 trillion KRW in illegal currency exchange using cryptocurrencies. The suspect used WeChat Pay or Alipay to receive funds abroad, then purchased overseas crypto assets, transferred the funds into a Korean wallet, and cashed out in KRW—completing the money cycle while bypassing official forex controls.

U Card: Not Banned Directly, but Under Indirect Surveillance

The most attention from Korean crypto users regarding this MOU is its potential impact on “U Cards,” a type of crypto payment tool.

A U Card allows users to load USDT or other USD stablecoins onto a card, then make purchases via Visa or Mastercard networks. The mechanism involves instant conversion of stablecoins to fiat currency at market rates during the transaction, enabling cross-border settlement without passing through traditional banking forex controls.

Popular compliant U Cards include Ether.Fi, Bybit Card, and Bitget Card.

Because U Cards bypass traditional banking systems, they are essentially a “gray cross-border payment shortcut.” The focus of this MOU on integrating overseas credit and debit card records means that U Card transactions—operating under Visa/Mastercard networks—are classified as “overseas debit/credit card usage” and fall within the scope of linked analysis.

Specifically, if a Korean resident’s U Card spending abroad significantly exceeds declared income, or if transaction records frequently show features related to crypto exchanges, the system may flag these as suspicious and trigger further investigation.

However, U Cards themselves are not illegal. The core issue is whether U Cards are used to circumvent Korea’s foreign exchange regulations. Legitimate, compliant use should not be affected. But Koreans making large overseas transactions with U Cards may face official scrutiny in the future.