[Asia Economy Reporter Hwang Yoon-joo] It has been identified that unclear funds transferred overseas through domestic banks have exceeded a total of 8.5 trillion KRW (6.54 billion USD).
According to the financial sector on the 14th, the Financial Supervisory Service (FSS) identified overseas remittance transactions exceeding 4.39 trillion KRW (3.37 billion USD) from Woori Bank and Shinhan Bank at the end of last month, and subsequently instructed all banks to conduct self-investigations on major transactions amounting to 2.6 trillion KRW (2 billion USD). Following their self-inspections, banks reported suspicious transactions totaling 3.15 billion USD (4.1 trillion KRW), which is significantly higher than the initial amount suggested by the FSS, estimating the total amount of abnormal overseas remittances to reach 6.54 billion USD (8.5412 trillion KRW).
Abnormal Overseas Remittance Amount Reaches 6.54 Billion USD
The FSS received reports of large abnormal overseas remittances from Woori Bank and Shinhan Bank at the end of June and launched on-site inspections, uncovering abnormal transactions totaling 3.37 billion USD, including 1.6 trillion KRW (1.31 billion USD) from Woori Bank and 2.5 trillion KRW (2.06 billion USD) from Shinhan Bank. Additional inspections detected another 20 million USD (26 billion KRW), increasing the abnormal overseas remittance amount from these two banks alone to 3.39 billion USD (420 billion KRW). The number of related companies reached 26.
The detected overseas remittance transactions mostly involved funds transferred from domestic virtual asset exchanges to trade corporation accounts, which were then sent overseas. Last month, the FSS instructed all banks to conduct self-investigations and report on transactions amounting to 2.6 trillion KRW (2 billion USD) from January last year to June this year, focusing on large-scale remittances by newly established or small businesses and virtual asset-related remittance transactions.
Accordingly, banks submitted their self-inspection results by the end of last month or early this month, revealing that the amount of suspicious transactions increased to 3.15 billion USD (4.1 trillion KRW), bringing the total amount of identified abnormal overseas remittances to over 8.5 trillion KRW. The number of related companies reached 65.
What Are the Types of Suspicious Transactions?
The self-inspection results showed suspicious transaction types including ▲ frequent deposits from banks operating accounts linked to virtual asset exchanges (Shinhan, Jeonbuk, Nonghyup, K Bank) ▲ cases where the same representative or overlapping offices and some employees among different companies raised doubts about their legitimacy ▲ violations of the Bank of Korea reporting obligations (Article 16 of the Foreign Exchange Transactions Act) when remittances were made by third parties other than the transaction parties ▲ large-scale remittances suspicious of illegality compared to the company's business history and scale, and other cases suspected of abnormal transactions such as requests for account inquiries by investigative agencies.
The Daegu District Prosecutors' Office Anti-Corruption Division, based on inspection data from the FSS on Woori Bank and Shinhan Bank, arrested three individuals related to ghost corporations on charges of submitting false documentation to banks while conducting virtual asset trading operations and remitting over 400 billion KRW in foreign currency overseas. A significant portion of these amounts was transferred through domestic virtual currency exchanges and banks, raising the possibility that these transactions were linked to arbitrage trading targeting the "Kimchi Premium," where domestic virtual currency prices are higher than overseas prices. In this regard, the FSS is expected to impose large-scale sanctions through inspections of banks involved in abnormal overseas remittances, including Woori Bank and Shinhan Bank.
The FSS plans to complete inspections of Woori Bank and Shinhan Bank by the 19th and may extend the period if necessary. Additionally, further inspections will be conducted on other banks where suspicious abnormal foreign exchange remittance transactions have been identified. An FSS official stated, "We plan to take strict measures against illegal and improper acts confirmed through inspections in accordance with relevant laws and procedures, and will share related information with relevant agencies if necessary."
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