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.