When looking into two local banks, South Korea’s financial trade lookout aka the Monetary Supervisory Service (FSS), found questionable cross-border transfers involving digital assets. These transactions totaled more than $3.1 billion US Dollars.
According to a report by the Monetary Occasions, Woori Financial and Shinhan Financial were identified as the institutions in question. The investigation was spearheaded by Lee Jun-soo, Deputy Governor of the Financial Companies company.
The FSS reported discovering unauthorized foreign exchange(forex) transactions totaling $1.2 billion at 5 Woori Financial Institution branches. Tese took place between May 2021 and June 2022.
In addition, 11 branches of Shinhan Bank made questionable forex operations totaling $1.9 billion (USD). These digital assets were moved between February 2021 and early July of this year.
The transactions were a component of an intricate currency laundering plan, according to the investigation. The financial agency was speaking on behalf of 22 trading companies that had received funding from local digital asset platforms.
These types of ‘shams’ in the forex industry almost relate to the Wyckoff trading strategy. These “Evil people,” with over $3-Billion could definitely sway the foreign exchange market’s ups and downs
The deputy governor stated that many of the odd payments had been proven to have come from trading company bank accounts after receiving funds from local bitcoin exchanges.
A few purchasing corporations were created to hold on to businesses related to tourism and jewelry. The FSS has linked the mysterious flow of money to a change in digital assets and a sale and purchase company. The money could be transferred to foreign businesses with officials closely connected to Korean-based businesses.
“The money is transferred to international companies whose managerial staff has tight ties to the South Korean-based enterprises, sometimes through the same worker or family members” said Lee.
But it’s still a mystery where the initial cash for the change in digital assets comes from. According to the FSS, it has asked all other banks in the country to file internal inquiries into international money transfer activities by the end of this month. FSS believes they may have been influenced by the scam.
The national prosecutor’s office and the Korea Customs Service will get reports from FSS on all liable businesses. Sanctions and fines may follow an investigation. According to the article, a second inquiry into the subject may be being carried out by the National Intelligence Service.
Malicious actors in the market for digital assets have received a clear message from South Korea that they are not welcome there. Prosecutors looking into the Terra UST and LUNA accidents conducted 15 raids earlier this month, including the residences and offices of seven local exchanges’ administrative staff.
The investigation shows how international regulators are closely examining connections between conventional financial institutions and the cryptocurrency industry. It’s ratcheting up regulatory activity in the virtual currency sector.
The country’s tax authority and prosecutors will receive information on any more unusual transactions discovered throughout the review in order to conduct further investigations.
The FSS stated in a statement, “We’ll take strong measures against the banks that have not complied with FX rules or those who have broken regulations against money laundering.”
Do Kwon and Shin Hyun-seong, co-founders of Terraform Labs (TFL), who built the Terra core, may come under attack from the federal authority. In addition, the government is creating new divisions and regulations to limit the risks that digital assets bring to users.
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