An NH Bank loans manager in South Korea has been accused of embezzling $12.5 million worth of company funds to invest in cryptocurrency. The manager, surnamed Kim, reportedly stole money on 106 occasions over four years, from June 2020 to August 2024. NH Bank discovered these irregularities during an audit conducted in August 2024. The audit revealed a suspicious flow of loans at a branch in Seoul, with Kim arranging loans using non-existent real estate as collateral. Kim admitted to using forged documents, including bogus real estate registry certificates, to secure the loans. He claimed to have invested in crypto but lost everything, leaving him with no money.
NH Bank has determined that $8.8 million of the $12.5 million total was embezzled using illegal lending methods. The bank is still conducting a probe and investigating more employees involved in the case. A spokesperson for NH Nonghyup Bank stated that the institution is committed to resolving all problematic issues arising from the embezzlement case and improving its systems to prevent future occurrences. NH Bank had previously introduced a network of roving auditors to perform spot checks at its branches, but it was noted that all 369 auditors were former employees of the bank, raising concerns about impartiality in the auditing process.
In a similar incident, a former loans manager at rival bank Woori in South Korea was also accused of stealing company funds to invest in crypto earlier this year. The ex-Woori staffer confessed to embezzling $7.3 million worth of the bank’s funds, primarily for crypto investments. He admitted that most of his crypto investments had resulted in failures. South Korean lawmaker Kang Jun-hyun emphasized the need for enhanced internal control systems in financial institutions to prevent such incidents from recurring. The National Assembly will be looking into the matter to ensure that the necessary measures are in place to prevent financial accidents in the future.
Both NH Bank and Woori Bank have faced significant losses due to employees misappropriating company funds for personal crypto investments. These incidents highlight the risks associated with the volatile nature of cryptocurrencies and the potential for misuse of funds within financial institutions. The South Korean government may need to implement stricter regulations and oversight mechanisms to prevent such cases in the future. The crypto industry continues to attract individuals seeking quick profits, but it also presents opportunities for illegal activities such as money laundering and embezzlement. Financial institutions must remain vigilant and enhance their internal controls to protect their assets and prevent similar incidents from occurring.
