South Korea’s health insurance executive embezzled 4.6 billion won in public funds and lost all money by “playing with cryptocurrency contracts”! Sentenced to 15 years

South Korea’s National Health Insurance Corporation (국민건강보험공단), which is responsible for national health insurance, has a mole. The head of the financial department embezzled 4.6 billion won in public funds, but lost everything because of investing in cryptocurrency.
(Preliminary summary: A college student made 80 million won by speculating in coins, and lost all his money after betting heavily on biotech stocks for one and a half months: Learn these two things)
(Background supplement: The competition for Korean won stablecoins has begun: banking alliances, technology giants, and Web3 companies have entered the field. Who can take the lead?)

The National Health Insurance Corporation of South Korea is similar to Taiwan’s National Health Insurance Administration, and it was recently revealed that 46 100 million Korean won (approximately NT$97 million) in embezzlement of public funds. The financial manager surnamed Choi misappropriated public funds and transferred them into cryptocurrency contracts and almost lost all of them. South Korea's Supreme Court upheld the original 15-year sentence on July 15, but did not find money laundering, leaving questions about the supervision of digital assets.

Where public funds go: Crypto casino

According to SBS reports, South Korean prosecutors stated that from April to September 2022, as the leader of the financial management team, the supervisor surnamed Choi, through 18 After misappropriating up to 4.6 billion won of public funds during a sub-system operation, the supervisor surnamed Choi was once found to be squandering money at a luxury resort in the Philippines. He was finally arrested in Manila in January 2024.

The National Health Insurance Corporation recovered 720 million won through civil litigation, but the remaining 39. More than 100 million Korean dollars were lost in the cryptocurrency contract market in charge of Choi, and the traditional recovery mechanism was ineffective.

Choi's first and second-instance judges said that "public servants are required to be honest, but the criminal methods of systematically misappropriating huge amounts of funds are very bad" and sentenced him to 15 years in prison. On the 15th, the final verdict was announced to uphold the original verdict.

Gambled money does not count as money laundering

South Korea’s current anti-money laundering regulations such as the Act on Reporting and Utilization of Specified Financial Transaction Information require exchanges to implement customer due diligence and report suspicious transactions. However, the court determined that although Choi's behavior was corruption, it did not constitute money laundering due to the final loss of funds, and it did not support the prosecutor's request for the recovery of 3.9 billion won.

South Korean prosecutors were dissatisfied that Choi misappropriated public funds to purchase tokens at a virtual currency exchange in South Korea and transferred them to overseas exchanges. The court judged him not to admit to violating money laundering laws and other crimes, which also caused discussion in the local encryption community.