"Employees Secretly Trading Coins Under Wives' Names"... FIU Uncovers Illegal Cases During On-Site Inspection

Completion of AML Inspections and Sanctions for 5 Major Won Currency Market Operators
Plan to Conduct Thematic Inspections on High AML Risk Vulnerable Sectors This Year

The Financial Intelligence Unit (FIU) announced on the 30th that it has completed on-site inspections of virtual asset operators who failed to comply with obligations such as employee trading restrictions, and has finalized sanctions related to anti-money laundering.

[Image source=Yonhap News]

Last year, the FIU conducted on-site inspections related to the implementation of anti-money laundering obligations under the Act on Reporting and Using Specified Financial Transaction Information (the "Special Act") on five Korean won market operators: Dunamu, Bithumb Korea, Streamy, Korbit, and Coinone. The FIU completed the sanction procedures for illegal and unfair acts. After deliberation by the Sanctions Review Committee, the FIU imposed institutional warnings and fines (up to 492 million KRW), as well as reprimands and warnings for employees of the violating operators, and required improvements within three months for the pointed-out issues.

As for major cases of illegal and unfair acts, virtual asset operator A failed to take any action despite employees trading virtual assets through accounts under their spouses' names, violating the employee trading restriction obligation. According to the Special Act, virtual asset operators must establish and enforce standards to restrict their employees from trading or exchanging virtual assets through the operator, and must also pay attention to transactions using accounts of others such as spouses and direct ascendants.

Additionally, despite a 95-year-old elderly customer mainly trading during early morning hours and continuously splitting transactions under 990,000 KRW to evade suspicion of money laundering, virtual asset operator B did not review whether these were suspicious transactions under false names, which was deemed illegal. Furthermore, virtual asset operator C was found to have insufficiently reviewed abnormal transactions where a specific customer received large amounts of virtual assets from external sources and withdrew cash only through selling without any buying activity.

An FIU official stated, "Although the details of individual operator sanctions cannot be disclosed to parties other than the concerned operators under the Special Act, we aimed to prevent recurrence of similar cases and strengthen anti-money laundering efforts by exemplifying major pointed-out issues. We will strictly sanction any similar problems that arise in the future based on the disclosed major illegal and unfair cases."

Meanwhile, on-site inspections of virtual asset operators will continue this year as well. In the first half of the year, on-site inspections will be conducted on coin market operators and wallet operators, and in the second half, based on the results of on-site inspections of the five major Korean won market operators, thematic inspections will be planned focusing on high-risk vulnerable areas for money laundering such as suspicious transactions under false names and abnormal transactions.