South Korea introduces an investigation into $ 3.4 billion that are associated with crypto

The South Korean supervisory authorities examine “abnormal” foreign exchange transactions worth $ 3.4 billion in two of the country's largest commercial banks for possible money laundering in connection with cryptoinvestment.

Since February 2021, two Korean banks-Woori Bank and Shinhan Bank-have taken unusual currency transactions worth 4.1 trillion WON ($ 3.4 billion), the financial supervisory service said on Wednesday. Most transactions concerned crypto exchanges and a local trading company, said the FSS.

After the FSS was informed about irregular business in June, he asked all Korean banks to carry out an internal review of all major currency transactions that were made on potential similar transactions between January 2021 and June 2022 and to present the results by the end of this month.

The investigation shows how global authorities examine the relationships between traditional financial companies and the crypto industry more precisely and also increase enforcement activities in the field of digital assets.

Information on other unusual transactions found during the review are shared with the tax office and the state's public prosecutor's office for further investigations.

"We will take strict measures against the banks that have not adhered to the Forex rules or who have violated the regulations of money laundering," said the FSS in an explanation.

The Woori Bank said that she would work together during the examination. Officials from Shinhan Bank could not be achieved immediately for a statement.

The investigation is carried out one week after prosecutors were searched for around 15 locations in May as part of their investigation of the 40-billion dollar crash by Stablecoin Terra and its digital token-opposite Luna, including the seven largest crypto exchanges in the country.

Prosecutors examine allegations against do Kwon and Daniel Shin, co -founder of Terraform Labs, who supported Terra and Luna. At the time, Shin denied the allegations and said: "There was no intention to deceive because we only wanted to renew the payment processing system with blockchain technology". Kwon did not respond to a request from the Financial Times after a comment.

The investigation was triggered by two symptoms that were submitted in the name of 81 private investors at the beginning of this year who accused the couple of fraud and violation of financial regulations.

The public prosecutor also investigates Chai Corp, the digital payment processing company led by Shin, which Terra had used as a means of payment, and against some risk capital groups that invested in the Terra project, according to the state Yonhap News. Shin was unavailable for a statement on this report.

The authorities banned the employees of Terraform Labs last month to leave the country. They also have former and current employees in order to find out "whether Kwon intentionally deceived investors with their incorrect algorithmic coins," said the public prosecutor.

The investigation is expanded because the new government of South Korea is under fire because it has potentially created perverse incentives for people with low incomes with its debt estate in the amount of 125 trillions. The plan includes a regulation to enact part of the interest payments to financially susceptible young people who have suffered enormous losses from their inventory.

The Financial Services Commission estimates that around 48,000 people will benefit from the temporary program that will be implemented for one year from September, as up to 126.2 billion will be paid by state funds. The plan has triggered complaints from local banks that were forced to extend debts and reduce interest rates for them.