South Korea’s BNK Busan Bank reportedly saw an employee in the foreign exchange team embezzle 1.48 billion Korean won ($1.1 million) of customer funds and invest them in bitcoin.
The unnamed employee allegedly stole the money several times between June 9 and July 25 of this year by depositing the funds customers received from abroad into a personal account belonging to his romantic partner.
The employee invested the misappropriated funds in bitcoin and other cryptos.
As a result, BNK Busan Bank will take legal action against the perpetrator and conduct an internal audit.
South Korea has seen a number of cases related to embezzlement by bank employees. For example, an employee of Woori Bank allegedly stole nearly $53.6 million (70 billion won) since 2012.
South Korea’s Financial Supervisory Service (FSS) is preparing more constructive and strict guidelines for banks’ internal control system to prevent further such incidents.
A financial sector official said, “I understand the purpose of regulation, but I hope the focus should be on prevention rather than punishment.”
The team has the specific objective of improving internal control for the prevention of financial accidents within the banking sector and continuing discussions on amendments to the governance law.
The FSS will aim to revise the internal control standards for executives such as CEOs. The law will be amended to require compliance with current internal control standards, and the executives concerned and also the CEO will be subject to sanctions in the event of a financial accident.
The financial authorities expect that management will be forced to look more closely at the possibility of an accident, and thus the burden on management will increase.