- FSS found “abnormal” foreign exchange transactions involving crypto exchanges Woori and Shinhan.
- Woori’s trade volume totaled 800 billion won and Shinhan’s topped an estimated 1 trillion won.
- Woori and Shinhan officials have denied giving any details to the media but assured cooperation with the FSS authority.
South Korea’s Financial Supervisory Service (FSS) found “abnormal” foreign exchange transactions involving crypto exchanges at two of South Korea’s leading financial institutions, the Woori Bank and the Shinhan Bank.
According to a report by The Korea Times, FSS launched an investigation to probe cases in which Woori’s trade volume totaled 800 billion won, around $69.5 million, and Shinhan’s outnumbered an estimated 1 trillion won. The Shinhan authority has not yet disclosed the specific transaction volume
Watchdogs recently uncovered evidence that suggests the possibility of money laundering and illegal foreign exchange trading from some of the capital that flowed into these domestic crypto exchanges.
FSS is still probing into the cases and scrutinizing whether officials from the two lenders have infringed any laws to make illegal foreign currency trading or money laundering. Meanwhile, netizens suspect Terraform Labs’ associations with this case.
However, the authorities consider that those who conducted these transactions made unjust use of foreign exchange trading because of ‘Kimchi Premium,’ a term referred to define the disparity between the price of cryptocurrencies at Korean exchanges as compared to the overseas ones.
In June, Woori alerted FSS that it found evidence of suspicious trading at one of its sales offices. It further reported that the trading volume was suspiciously large and was conducted through various corporate accounts.
Since then, FSS officials launched an on-site inspection focusing on whether Woori violated any rules of the Foreign Exchange Trading Act.
Regardless, it remains to be seen whether the suspicious transactions were aimed at crypto trading or reaping profits. Earlier this year, South Korea’s Hana Bank was fined 50 million won by FSS for violating this act, after its sales office in Seoul failed to monitor suspicious foreign exchange trading of 200 billion won. FSS ordered to suspend operations in that office for four months.
Citing the confidentiality of the case, the officials from the two lenders denied providing details on the ongoing investigation apart from confirming to cooperate with the FSS authority. Upon questioning, an official from Woori opined that
We have to wait until the authority finishes its investigation and shares the results
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