An employee of BNK Busan Bank, one of South Korea’s top banks, has allegedly stolen 1.48 billion Korean won, equivalent to $1.1 million, from customers’ funds. The report alleges that the employee invested the stolen funds in Bitcoin and other cryptocurrencies.
While the employee’s name hasn’t been made public yet as authorities are still investigating the crime, the report stated that the crime was committed between June 9 to July 25. He was able to pull off the fraud by diverting funds deposited by customers from overseas into a personal account shared with a romantic partner.
Local media in South Korea reported that the employee invested embezzled customers’ funds in Bitcoin and other digital assets. BNK Busan Bank plans to take criminal actions against the employee for misappropriating customers’ funds as part of the bank’s policy. In addition, the bank is working with the relevant authorities to audit its actions and win investors’ trust again.
Recently, there has been an increase in bank fraud, with more than 10 cases of fraud perpetrated by bank staff this year alone in South Korea. This year, an employee of Woori Bank was reported to have stolen over 70 billion won, equivalent to $53.6 million, within 13 years. The crime started in 2012 but was only discovered this year.
The case for a stringent internal control system
Authorities are so far not been impressed by how banks are dealing with fraud within their organizations, especially with the increasing cases of employee fraud. Now the country’s Financial Supervisory Service is said to be working on releasing more stricter guidelines to prevent a repeat.
South Korea’s Financial Supervisory Service has constantly played an active role in mitigating frauds. In 2021, the agency stated that it would impose an $84,844 fine on employees of crypto exchanges caught trading on the platform. This was intended to prevent insider trading, which may result in investors’ losses.