Unusual Foreign Currency Transfers Exceeding 7 Trillion Won Detected in Futures and Securities Firms... Financial Supervisory Service Expands Investigation

[Asia Economy Reporter Kang Nahum] The Financial Supervisory Service (FSS) has detected suspicious overseas remittance transactions amounting to 7 trillion KRW at NH Futures and will launch a large-scale investigation into whether similar transactions exist at all other futures and securities firms.

The FSS announced on the 8th that it began an on-site inspection on the 19th of last month after recognizing signs of large abnormal foreign currency remittance transactions at NH Futures.

During the inspection, the FSS confirmed allegations of abnormal foreign currency remittance transactions by a foreign investment corporation through tracking the flow of funds and is currently sharing the details with investigative authorities.

The scale of the abnormal foreign currency remittance amounts to 5.04 billion USD (7.15 trillion KRW), which is the amount remitted from funds withdrawn from domestic virtual asset exchanges since 2019 through entrusted accounts to overseas accounts of foreign investment corporations.

The representative of the foreign investment corporation, who holds Chinese nationality, used the method of opening a corporate entrusted account at NH Futures under the name of the corporation under the pretext of won/dollar futures trading.

First, funds withdrawn from domestic virtual asset exchanges were gathered into the foreign investment corporation’s account through the representative of the foreign investment corporation and multiple individuals. Then, the funds were transferred to the corporate entrusted account opened at NH Futures and remitted to the foreign investment corporation’s overseas account through an investment-dedicated external account opened at NH Futures’ bank. Ninety-nine percent of these overseas accounts were opened in the United States.

Additionally, funds were also remitted from the foreign investment corporation’s overseas accounts back to the corporate entrusted account at NH Futures, exchanged, and then transferred to the foreign investment corporation’s domestic account, from which they were sent to domestic virtual asset exchanges through multiple individuals.

An FSS official pointed out, "These transactions are presumed to have been conducted by foreign investors through investment intermediaries for virtual asset arbitrage trading aimed at exploiting the kimchi premium," adding, "There are allegations of violations of capital transaction regulations under the Foreign Exchange Transactions Act."

The FSS plans to promptly conclude the inspection of NH Futures and, if any illegalities are found in foreign exchange operations and anti-money laundering duties, will take strict measures according to relevant laws and regulations.

Meanwhile, earlier, abnormal foreign currency remittances amounting to 7.22 billion USD (10.1 trillion KRW) were revealed in the banking sector, including Woori Bank, causing significant social controversy. According to the FSS, the largest amount of abnormal foreign exchange remittance currently identified is at Shinhan Bank with 2.36 billion USD. For other banks, Woori Bank follows with 1.62 billion USD, then Hana Bank with 1.08 billion USD, and KB Kookmin Bank with 750 million USD.

This content was produced with the assistance of AI translation services.