Financial watchdogs in South Korea are checking commercial banks’ foreign exchange transactions for the illegitimate use of cryptocurrencies.
An unnamed Financial Supervisory Service official said that some of the transactions in question included cryptocurrency exchanges. That is why investigators are looking into any potential connections to currency speculation or money laundering involving digital assets.
While the official didn’t mention the exchanges in question, Shinhan Bank is one of the institutions under investigation.
A closer look at crypto-transactions
According to earlier reports from Yonhap News Agency, Woori Bank transacted around 800 billion won ($611 million) on 23 June. On 30 June, Shinhan Bank also took part in a transaction for 1 trillion won.
An FSS representative acknowledged the information, with a Shinhan Bank representative confirming that a regulatory investigation is ongoing. The latter, however, said they were unable to disclose the precise amount of the transaction or its connection to cryptocurrency exchanges since those details can only be made public once the inquiry was over.
The Financial Services Commission is officially pushing for the creation of a special committee on virtual assets. Due to the recent “LUNA incident,” there have been increasing calls for investor safety and the establishment of laws for the virtual asset market.
On the 19th, a high-ranking representative and the FSC confirmed that the latter is now working to establish a special committee for virtual assets. Members of the FSC, representatives from academia and the legal sector will make up the committee. At the earliest, a special committee will be established this month.
Events following the collapse of Terra
Following the failure of the TerraUSD stablecoin, South Korean financial regulators conducted “emergency” inspections of domestic cryptocurrency exchanges. The FSC and the FSS of South Korea have requested information on transactions involving TerraUSD and LUNA from regional cryptocurrency exchange operators.
This includes details about trade volumes, closing prices, and the number of relevant investors. Additionally, research on the causes and remedies for the market crash were requested from the exchanges.
Later, the FSS began investigating companies that serve as gateways for payments for digital assets. The FSS questioned 157 payment gateways on their strategies, services relating to cryptocurrencies, and disclosure of digital assets.
Following the failure of UST and LUNA, South Korea’s national tax authorities reportedly penalized Terraform Labs and Kwon $78 million for tax evasion. Legislators invited Kwon to take part in a legislative investigation of the events leading up to Terra’s collapse and UST’s de-pegging.
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