CJ - Cryptocurrency Specialist
The Financial Supervisory Service, the financial watchdog for South Korea, has discovered that $7.2 billion has been lost through "abnormal" foreign cryptocurrency exchange transactions since June 2022, the majority of which were moved through cryptocurrency exchanges.
Transfers from Hana Bank, Kookmin Bank, Nonghyup Bank, Shinhan Bank, Woori Bank, and seven other domestic institutions were reportedly the subject of an investigation, according to a recent Bloomberg article.
According to other local media sources, South Korean officials searched the Woori Bank in Seoul as part of their investigation.
A suspect foreign exchange transaction that was carried out through a commercial bank was discovered throughout the examination. The act is presently thought to have been motivated by the "kimchi premium," a reference to how pricey the local virtual currency market is. The Woori Bank offices are being searched and sequestered by the Daegu District Prosecutor's Office's prosecutors, who are also looking into one of the bank's workers who is allegedly involved in illicit foreign exchange remittance.
According to a prior report from Bloomberg, South Korea was looking into Woori and Shinhan for the $3.4 billion in international money transfers.
By the end of October, the South Korean bureau's investigation should be complete.
Additional Insights from the Prosecution
It was discovered that 82% of the transfers were conducted in US dollars, with most of the money going to Hong Kong. The Financial Supervisory Service also found more "abnormal" transfers totaling $680 million. Additionally, according to local media, the government seized 259.8 billion won ($184.4 million).
The prosecution had previously shown the existence of multiple fictitious companies engaged in unreported crypto assets trade, as well as the remittance of 400 billion won in foreign money overseas. Three officials were subject to an investigation and detained in relation to the fictitious firms.
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