The Financial Supervisory Service of South Korea (FSS) is reportedly launching an investigation of the forex records of local banks following suspicious activities reported in one branch of Woori Bank.
According to The Korea Times, such activities accounted for 800 billion won or $616 million in the branch located in Seoul in 2021. A single bank branch conducted more than 145 times the average amount of foreign exchange trading, which raised suspicion.
The bank reported the suspicious trading records to the financial authority following an internal audit. As soon as the FSS received the report, it conducted an on-site investigation at the branch.
“As abnormal levels of foreign exchange transactions were detected at some banks, including Woori Bank, the FSS urged all banks to conduct their own internal inspections,” an official from the FSS commented.
Shinhan Bank, which reported similar abnormal foreign exchange trading activities, was also investigated by the financial watchdog agency. In addition to investigating the cases for possible violations of the country’s anti-money laundering laws and foreign exchange transactions act, the FSS also ordered other local banks to conduct internal inspections regarding their foreign exchange trading records.
An Investigation Is Underway
As reported by Finance Magnates, on June 23, the financial watchdog conducted an on-site inspection of the lender in response to the report. An FSS inspection will focus on whether the lender violated any of the regulations under the Foreign Exchange Transactions Act and applied anti-money laundering tactics sufficiently.
A more detailed investigation will be conducted into the source of the transactions by the watchdog. Some suggested that suspicious transactions may have been part of crypto-related money laundering . However, according to Woori, no specific evidence has been found to support the argument for now. “The investigation by the watchdog is expected to be completed as early as the end of next week,” the Woori official said, who added: “As the watchdog launched the investigation on the suspicious foreign exchange transaction, we need to wait and see until the investigative results are shared by the authority.”
