South Korean regulators are investigating two of the country’s largest banks for carrying out $3.1 billion in “abnormal” foreign exchange transactions. The banks – Shinhan Bank and Woori Bank – have been under investigation for money laundering related to crypto investments since February 2021.
The Financial Surveillance Service (FSS) obtained information on unusual transactions in June before asking all Korean banks to conduct an internal review of their large currency transactions from January 2021 to June 2022. The investigation shows how global authorities are closely watching the ties between traditional banks, financial firms and cryptocurrency-focused businesses. Regulators have increased their oversight activities in the digital asset space.
FSS will take serious action against the culprits
All details of irregular transactions discovered after the review will be sent to prosecutors and the South Korea tax office for further investigation.
The FSS said that serious action will be taken against banks found guilty of any violation or those who failed to comply with forex rules.
In response to the situation, Woori Bank said it would cooperate with investigators and provide any information they require. However, Shinhan Bank officials could not be reached for comment.
Your capital is in danger.
The investigation comes just a week after prosecutors raided 15 centers, including the country’s seven largest crypto exchanges, during their investigation into the $40 million market crash of stablecoin TerraUSD.
Terraform co-founders under investigation
The crash, which also included the Luna token, caused a lot of upheaval in the market as investors lost almost all of their funds invested in the token.
Prosecutors are still investigating charges against Terraform Labs co-founders Daniel Shin and Do Kwon. The investigation must reveal if the co-founders knowingly misled investors or had something to do with the collapse of stablecoins. Shin denied the allegation, saying he had no intention of misleading investors and was only looking to innovate the digital payment and blockchain system.
The investigation was triggered by two complaints filed on behalf of 81 investors who accused the co-founders of violating financial regulations.
Shin’s digital payment settlement company, Chai Corp, is also being investigated by prosecutors. The company used terra as a payment tool before the stablecoin collapsed.
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