| Financial Supervisory Service (FSS) Deputy Governor Lee Joon-soo speaks during a press conference held at the headquarters of the FSS in Seoul, Wednesday. Yonhap |
Most money sent to corporate accounts in Hong Kong by unknown local corporations
By Anna J. Park
After a month of official investigations, the Financial Supervisory Service (FSS) has found out that over 4.1 trillion won ($3.1 billion) worth of suspicious international money transfers took place at Woori Bank and Shinhan Banks over a one-year period, starting last year.
According to the FSS' announcement concerning its investigation of the matter on Wednesday, a total of 22 business entities are involved in the suspicious foreign exchange remittances.
At Woori Bank, a total of 1.6 trillion won of abnormal foreign exchange transactions were spotted at the bank's five branches over the course of May of last year to early June of this year. Another 2.5 trillion won of dubious international money transfers were also carried out at 11 Shinhan Bank branches from February of last year to early July of this year. The number of money transactions exceeded 931 at Woori and 1,238 at Shinhan.
"It's been confirmed that most of the abnormal remittances were sent from trade corporations' banking accounts after the accounts received money from local cryptocurrency exchanges," Lee Joon-soo, the deputy governor of the FSS, said during a press conference on Wednesday afternoon.
The FSS launched the investigation late last month upon receiving reports by the banks about the large sums of suspicious foreign exchange remittances.
The ongoing FSS investigation showed that most of the dubious money transfers were sent to overseas corporations' accounts, not any foreign cryptocurrency exchanges. It turned out that CEOs or key management members of both local corporations that sent money and overseas companies that received money were the same people or closely related family members.
"Some of the 22 trade corporations involved were nominally registered to operate jewelry or tourism-related businesses, yet their revenues or business operations remain very opaque and suspicious. And about $2.5 billion of the total $4.1 billion were sent to companies in Hong Kong," an official at the FSS said, following the press briefing.
However, the FSS hasn't yet figured out the source of the money.
"The FSS has almost figured out the money transaction flows stemming from local cryptocurrency exchanges but it hasn't yet figured out the source of the money coming into the coin exchanges in the first place," the FSS deputy governor said.
Believing that similar foreign exchange transactions could have been conducted at other banks, the FSS has ordered all banks in the country to submit the results of their internal investigations on the matter by the end of the month.
The financial authority asked the banks to look closely into international remittance transactions by unknown or new corporations that sent large sums of money much exceeding such companies' capital assets, or transactions that are related to cryptocurrency exchanges.
If more corporations are found to be involved in similarly dubious money transfer transactions, the FSS will report the cases to the prosecution as well as to the Korea Customs Service. While the FSS' current investigation is slated to be wrapped up by early August, the National Intelligence Service is also known to have launched its own probe into the cases.
When bank violations of the country's foreign exchange regulations and anti-money laundering law are confirmed, the financial authority can impose strict sanctions on them according to the law.