South Korea-based Busan Bank’s employee steals 1.4B won in customer funds to buy crypto

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A for­eign employ­ee of South Korea-based Busan Bank stole rough­ly 1.48 bil­lion won of cus­tomer funds and invest­ed the mon­ey in cryp­to assets like Bit­coin (BTC), local media report­ed on August 1.

Accord­ing to the report, the employ­ee stole the funds between July 9 and July 25.

South Korea eyes stricter control measures

South Korea is con­sid­er­ing review­ing its Finan­cial Com­pa­ny Gov­er­nance Act because of the theft, the report said.

The country’s Finan­cial Super­vi­so­ry Ser­vice (FSS) said the embez­zle­ment hap­pened due to the lack of inter­nal con­trols in eight key areas, includ­ing per­son­nel man­age­ment, Self-store audit, and seal management.

The reg­u­la­tor also dis­cov­ered that abnor­mal trans­ac­tion mon­i­tor­ing pro­ce­dures and irreg­u­lar over­seas remit­tance sit­u­a­tions also played a role in major embez­zle­ment incidents.

The FSS said that Shin­han and Woori Banks report­ed over 4 tril­lion won in over­seas remit­tances, while the total sus­pi­cious bank­ing trans­ac­tions amount­ed to around 7 tril­lion won.

While the regulator’s move to revise the cor­po­rate gov­er­nance act is not direct­ly relat­ed to irreg­u­lar remit­tances and major embez­zle­ment, it is believed that such revi­sion could improve inter­nal con­trol practices.

The FSS recent­ly announced that it would revise the Act to improve management’s respon­si­bil­i­ty for inter­nal control.

It also formed a task force sad­dled with strength­en­ing inter­nal con­trols to pre­vent acci­dents in the bank­ing sec­tor and has been dis­cussing amend­ments to the law.

Part of the expect­ed revi­sion is to make the CEO observe inter­nal con­trol stan­dards. Cur­rent­ly, the law only impos­es the duty of set­ting inter­nal con­trol standards.

Such amend­ment will make exec­u­tives of finan­cial insti­tu­tions liable in case of finan­cial acci­dents, and they might be sanctioned,

Author­i­ties believe such laws will make exec­u­tives pay more atten­tion to the company’s inter­nal operations.

Addi­tion­al­ly, the FSS is con­sid­er­ing set­ting up an inter­nal con­trol sec­tor as part of the eval­u­a­tion stan­dards for finan­cial insti­tu­tions. It may also increase the strength of its audit unit.

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