Busan Bank representative embezzled $1.1 million to invest in cryptocurrencies

Photo - Busan Bank representative embezzled $1.1 million to invest in cryptocurrencies
An employee of South Korea’s regional bank, Busan Bank, which belongs to BNK Financial Group, is accused of embezzling 1.48 billion won ($1.1 million) from customer funds.
He transferred them to the bank account of his romantic partner and then invested in BTC.

The offender was an employee of an exchange office at one of the bank’s branches. Between July 9 and 25, he was stealing funds from Busan Bank customers, working by the following scheme: the man was transferring money received from abroad to the bank account of his partner, with whom he was in a relationship, and then used them to invest in cryptocurrencies, including BTC.

According to preliminary reports, the theft amounted to 1.48 billion won, equivalent to $1.1 million. Busan Bank executives are going to sue the culprit and announce an upcoming internal audit.

Bank frauds are increasing in South Korea

Busan Bank is not the only financial institution in South Korea whose reputation was questioned. Over the eight months of this year, there have been more than 10 cases of embezzlement by bank employees. Moreover, some of them had been going on for several years but were discovered only now.

For example, a specialist of Woori Bank had been embezzling client funds since 2012. In 10 years, the offender illegally seized about 70 billion won ($53.6 million). There was also fraud during international transfers. The Financial Supervisory Service reports that Woori Bank and Shinhan Bank have transferred more than 4.1 trillion won to foreign accounts, with the total amount of dubious transactions in the sphere reaching 7 trillion won.

The FSS cites a lack or complete absence of internal controls in several areas, including seal and personnel management, self-service audits, and monitoring of abnormal transactions, as the main reasons for the theft of funds.

Amid increased fraud within financial institutions, the FSS said it was necessary to amend the Law on Corporate Governance. A joint working group has already been formed with the banking sector, whose main task is to improve internal controls to prevent financial accidents.