South Korea probes banks linked to $3.1bn money laundering scandal

South Korean watchdogs are looking into forex transactions worth $3.1bn linked to crypto investments which, in turn, are linked to potential money laundering.

The Financial Supervision Service (FSS) has been alerted to the suspicious transactions which appear to be linked to two of the biggest commercial banks in South Korea. The report has been corroborated by the Financial Times.

Regulators have been tight-lipped, but official reports have said that the transactions involved a domestic trading company and crypto exchanges.

FSS, the official financial authority in the country, said that it’s taking measures against the banks in question who may have violated the regulations.

As a result, all Korean banks have been ordered to run an internal review of any large currency transactions between January 2021 and June 2022.

This is just the latest of similar moves undertaken globally in which financial regulators are seeking evidence of potential foul play involving cryptocurrencies and traditional finances.

Crypto money laundering has been said to be a rarity, because of how traceable everything is on the blockchain.

In fact, when Russia invaded Ukraine and cryptocurrency exchanges were told to leave the country for fears of facilitating money laundering, most companies responded that they would not on account that traditional finance is still the preferred domain for money launderers.

In February this year, the US Department of Justice indicted two people on charges of money laundering upward of $4.5bn.

If FSS finds proof of money laundering that took place at some of the country’s largest banks, it will call into question the current safety mechanisms that track potential ties to money laundering in crypto and mainstream finance.

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Source

Updated: 07/28/2022 — 14:00