Senior South Korean Police Officials Charged in Cryptocurrency Bribery Case

South Korean prosecutors have indicted two senior police officers and five civilians for their alleged involvement in a money laundering network linked to cryptocurrency and voice phishing scams.

Key Takeaways:

Two senior South Korean police officials and five individuals associated with cryptocurrency were charged in a bribery and money-laundering case.
Prosecutors claim the officers accepted cash and luxury items for sharing internal investigative information and providing favors.
The operation is associated with 249.6 billion won in funds from voice-phishing that were laundered through cryptocurrencies.

The Suwon District Prosecutors’ Office Criminal Division 2 announced the indictments were filed without detention. The charges include violations of the Act on the Aggravated Punishment of Specific Crimes and the Act on the Regulation and Punishment of Criminal Proceeds Concealment, as reported by The Chosun Daily on Thursday.

Senior South Korean Police Officials Indicted in Crypto Bribery Case

Police Officials Involved in Cryptocurrency Bribery Ring

Among those indicted is a former police station chief, referred to as A, along with a former officer from the National Police Agency, identified as B.

Prosecutors allege that both A and B accepted money and luxury goods from executives of a cryptocurrency business in exchange for sensitive information related to ongoing investigations and operational assistance.

Five additional individuals, including a crypto company operator known as C and a chief executive referred to as D, were charged for allegedly providing bribes and engaging in the laundering of criminal proceeds using digital assets.

Investigators claim that A received a total of 79 million Korean won between July 2022 and July the following year after being connected to C by an official from a domestic cryptocurrency exchange. In return, A is accused of supplying investigative details and "conveniences," such as checking whether officers he knew were involved in C's case, and introducing lawyers to mitigate the investigation's impact.

Prosecutors also allege that A was enticed by promises of access to cryptocurrencies ahead of their listing and assurances that if investments failed, they would be refunded.

As for B, he allegedly received goods and favors worth 10 million won on about ten occasions from February of last year to February this year. According to the prosecutors, B was introduced to C and D by A and subsequently accepted designer items such as wallets, shoes, and coats. In exchange, B is accused of confirming details of the ongoing case and requesting the lifting of payment suspensions on accounts connected to the alleged crimes.

Authorities report that the cryptocurrency executives operated a laundering scheme that transformed 249.6 billion won in voice phishing revenue into digital assets from January to October of last year. The prosecution estimates the illegal profits at 11.2 billion won and has implemented seizure and asset-preservation measures for 1.5 billion won by tracing concealed properties.

South Korea to Punish Crypto Exchanges for AML Violations

Reports indicate that South Korea’s financial regulatory body is gearing up to impose new sanctions on domestic virtual asset exchanges as part of their intensified efforts against anti-money laundering violations that they believe jeopardize the integrity of the country's rapidly expanding cryptocurrency market.

Financial regulators are expected to levy both institutional and individual penalties, along with fines, against major trading platforms that have failed to comply with anti-money laundering regulations. The Korea Financial Intelligence Unit, also known as FIU, is processing cases based on the order of its on-site inspections, effectively employing a first-in, first-out approach.