- Unnamed staffer stole $724,620, says bank.
- Bank will write off most of the losses.
- Police set to investigate.
A loans manager at the South Korean financial institution Kwangju Bank embezzled $724,620 from the bank and spent it on crypto investments.
The lender says the unnamed manager stole the money between May and November 2023, but only realised the funds were gone in the second half of this year, wrote KBC News.
“We discovered this embezzlement case during a recent review of project financing loan interest history data,” a Kwangju Bank spokesperson said. “We will decide on the level of disciplinary action we will take once we have concluded an internal audit.”
The employee has paid the bank back $105,581, the spokesperson said.
However, the staffer appears to have had little luck with crypto investing. The bank said it would consider $619,100 of the lost funds to be “irrecoverable” and said it would “write off the loss.”
Criminal investigation likely
The spokesperson said the employee “manipulated interest rates on a project financing loan for their own cryptocurrency investment purposes.”
Kwangju Bank has suspended the employee and has filed a criminal complaint. Police are following up with their own investigation.
In June 2024, prosecutors charged a former Woori Bank assistant manager with stealing money from a corporate loans fund to fund a crypto buying spree.
The assistant manager, who worked at a Woori branch in Gimhae, South Gyeongsang Province, forged loan documents to steal around $7.3 million worth of the bank’s funds. He said he spent most of the money on crypto investments.
The man also confessed that his crypto investments had “failed.”
Bank’s parent company has crypto interests
Kwangju Bank is a regional bank that primarily caters to the city of Gwangju and the South Jeolla Province.
It is part of the JB Financial Group, which also includes Jeonbuk Bank. The latter is the only regional bank to have so far entered into a partnership deal with a domestic crypto exchange, signing a landmark deal with GOPAX in August 2022.
Under South Korean law, only exchanges with these partnership deals can offer their clients access to Korean won services.
Exchanges that do not have a banking deal can only offer customers crypto-to-crypto trading services.
Banks have traditionally been averse to signing these deals, as they involve absorbing hacking and other security-related risks.
But Jeonbuk’s relationship with GOPAX has since run into rough waters, following Binance’s aborted attempt to acquire GOPAX.
GOPAX has since found itself in financial troubles, stemming back to its partnership with the now-defunct FTX exchange.
In May, GOPAX announced that Jeonbuk Bank has “temporarily” agreed to a short-term partnership deal that is set to expire in February 2026.
Tim Alper is a news correspondent at DL News. Got a tip? Email at tdalper@dlnews.com.
