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South Korean Authorities Arrest Three in $3.4B Crypto Probe

South Korean authorities arrested three people as a part of a probe of $3.4 billion worth of illegal crypto transactions. According to the prosecutor’s office, the law enforcement detained three individuals who allegedly had paper companies and managed a crypto trading business without registration.

Three Suspects Accused of Running Unregistered Crypto Companies

South Korean prosecutors reportedly arrested three individuals in a probe of $3.4 billion worth of foreign-exchange transactions due to potential links to illicit crypto trading activities, according to Bloomberg. The arrests were made due to allegations that these individuals started and operated crypto trading companies without registering their businesses, as per the text message by the Daegu District Prosecutors’ Office.

In addition, the suspects were also linked to false data submissions to banks and significant international currency transactions overseas, the office added. According to a local news outlet Chosun Ilbo, the suspects are associated with a company that transferred 400 billion won ($307 million) worth of funds overseas from a Woori Bank unit based in Seoul, bringing them substantial arbitrage profits.

Furthermore, there were numerous irregular transactions worth a total of 1.6 trillion won that transpired at five Woori Bank branches in the period from May 2021 to June 2022, according to South Korea’s Financial Supervisory Service. The agency also noted similar transactions totaling 2.5 trillion won across 11 Shinhan Bank branches in the period between February 2021 and July 2022.

The South Korean prosecutor’s office did not provide additional details on specific figures. Woori Bank and Shinhan Bank also declined to comment on the matter.

Crypto Controversy in South Korea Continues

The arrests mark the latest in a series of controversial crypto events in South Korea in the recent period. Before this, South Korea was one of the global leaders in terms of digital currency adoption.

Last month, the South Korean prosecutors raided several local digital assets exchanges as a part of an investigation into the abrupt crash of TerraUSD (UST) and its sister token LUNA earlier this year. The collapse sent shockwaves through the entire crypto industry and was one of the important factors that contributed to the sharp crypto market drawdown this year.

South Korean authorities opened a probe shortly after Terra’s crash in May, with the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) requesting transaction data from local crypto exchanges. The country’s lawmakers are currently formulating regulations for the trading of digital assets and are expected to introduce the so-called Digital Asset Basic Act in the first half of 2023.

This article originally appeared on The Tokenist

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