Woori Bank Acquitted in First Trial of Aiding 1 Trillion Won Virtual Asset Illegal Remittance Scheme

Court: "Woori Bank Not Subject to Dual Liability Provision"
Prosecution Sought 100 Million Won Fine, But Court Delivers Not Guilty Verdict

The Woori Bank Corporation, which was brought to trial on charges of aiding an employee who executed major foreign exchange remittances in collusion with a virtual asset illegal transfer ring, was acquitted in the first trial.

On May 14, Lim Hyewon, the presiding judge of the 19th Criminal Division of the Seoul Central District Court, acquitted Woori Bank Co., Ltd., which had been indicted for violating the Foreign Exchange Transactions Act. Prosecutors had argued that since Branch Manager A of Woori Bank and others were convicted for their involvement in virtual asset illegal remittance activities, the corporate entity Woori Bank should also be held responsible. A was sentenced to three years in prison in June 2023 for participating in the illegal virtual asset remittance scheme between 2021 and 2022.

The illegal virtual asset remittance scheme involves receiving virtual assets from residents abroad, selling them at domestic exchanges, and then sending the proceeds overseas as foreign currency—a form of illegal foreign exchange transaction. This structure takes advantage of the so-called "Kimchi Premium," where the price of virtual assets in Korea is higher than overseas, to make a profit. It was found that those executing the transactions in Korea received a certain percentage as commission.

It was determined that A, knowing that the illegal remittance ring submitted false invoices and other documents to disguise the remittance as import payments, instructed the responsible employee to carry out the remittance anyway. The amount remitted by A is known to be in the range of 1 trillion won.

The prosecution claimed that under the Foreign Exchange Transactions Act’s dual liability provision, the corporate entity Woori Bank should also be punished. The dual liability provision stipulates that if an employee or similar party commits an illegal act in connection with their work, the corporation can be held responsible separately from the individual.

The prosecution argued that Woori Bank abetted A’s illegal foreign exchange work and that the responsible employees failed to verify whether the Bank of Korea reporting obligation was fulfilled when conducting capital transactions of 1 billion won or more. In their closing argument, prosecutors requested a fine of 100 million won be imposed on Woori Bank.

However, the court found Woori Bank not guilty of all charges. The reason given was that Woori Bank was not the beneficiary of the profits from the violation and therefore the dual liability provision could not be applied. The court stated that the purpose of the dual liability provision is to punish not only the individuals who actually commit the violation, but also those entities that benefit from the violation if they fail to comply with reporting obligations, and determined, "Woori Bank is not subject to the dual liability provision."

The court also did not recognize the alleged violation of verification obligations by the responsible employees. The court held that simply failing to properly check supporting documents cannot be equated with failing to verify whether reporting was required, and that such an interpretation would excessively expand or analogize penal provisions in violation of the principle of legality. The court further ruled that, since the employees believed the remittance was for payment of import goods not requiring reporting or approval, Woori Bank as a corporation cannot be held separately liable for violation of verification obligations.

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