Financial Services Commission to Carry out On-Site Inspection on South Korean Banks Regarding Money Laundering Issue

Apr 10, 2018

Financial Services Commission’s (FSC) Financial Intelligence Unit (FIU) and Financial Supervisory Service (FSS) made an announcement that they are going to examine 3 South Korean banks that are dealing with cryptocurrency exchanges regarding money laundering situation.
Inspection period will start on the 19th and end on the 25th and it will be performed at Nonghyup Bank, Kookmin Bank, and Hana Bank.
FIU and FSS are carrying out these inspections to check whether these banks are carrying out ‘Guideline for Preventing Money Laundering Regarding Digital Money), which came to effect on the 30th of January, and whether there are any issues that FIU and FSS need to correct or supplement.
FIU and FSS have come up with these banks based on whether they provide checking accounts that check one’s identity and trade volume (number of accounts, size of balance) of banks that handle cryptocurrencies.
Out of these banks, Nonghyup Bank provides checking accounts that check one’s identity when cryptocurrencies are dealt. Although Kookmin Bank and Hana Bank do not provide such checking accounts, they are dealing with cryptocurrency exchanges. It is assumed that Kookmin Bank and Hana Bank are operating many so-called ‘honeycomb accounts’ that manage personal transactions accounts that are under business accounts through ledgers.
FIU and FSS are going to focus on whether there are still unsatisfactory issues that need to be improved since the first on-site inspection that took place in January, whether these banks are following the guideline, and whether these banks are taking appropriate responsibilities on preventing money laundering involving cryptocurrencies through business accounts and personal accounts.
In the future, financial authorities are also going to examine other financial institutions whether they are following the guideline as well.
Staff Reporter Ham, Jihyun |

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