Woori Bank corporation acquitted in first trial on charges of 'aiding and abetting employee's virtual asset currency exchange fraud'

Woori Bank corporation acquitted in first trial on charges of 'aiding and abetting employee's virtual asset currency exchange fraud'

"Not the beneficiary of profit… charge of failing to fulfill verification duty is also an excessive interpretation"

Woori Bank, a corporation indicted on charges of aiding and abetting an employee who conspired with a virtual asset currency exchange ring to execute large-scale foreign exchange remittances, was acquitted in the first trial.

Presiding Judge Lim Hye-won of the 19th Criminal Division of the Seoul Central District Court acquitted Woori Bank Co., Ltd., which was indicted on charges of violating the Foreign Exchange Transactions Act, on the 14th.

The prosecution indicted Woori Bank, arguing that the corporation was also responsible when branch manager A of Woori Bank and others were investigated for violating the Foreign Exchange Transactions Act.

A was sentenced to three years in prison in June 2023 for allegedly participating in the so-called 'virtual asset currency exchange' crime between 2021 and 2022.

Virtual asset currency exchange refers to the act of receiving virtual assets from a person residing abroad, trading them on a domestic exchange, and then remitting the proceeds in foreign currency. Those who execute the transactions in Korea receive a certain percentage of commission.

This method involves earning profits by utilizing the so-called 'Kimchi Premium,' where the trading volume on South Korean virtual asset exchanges is larger than on foreign exchanges.

It was investigated that A, knowing that the virtual asset currency exchange ring intended to remit large sums of foreign currency by submitting false invoices and disguising them as import payments, instructed the responsible employee to make the remittance. The amount remitted by A is reportedly in the range of 1 trillion won.

The prosecution indicted Woori Bank based on the dual punishment provision (Article 31) of the Foreign Exchange Transactions Act.

The dual punishment provision is a clause that holds the corporation responsible in addition to punishing the individual if an employee commits an illegal act.

That is, Woori Bank was accused of aiding and abetting A's illegal foreign exchange operations and of failing to verify whether the responsible employees fulfilled their statutory duty to report capital transactions exceeding 1 billion won to the Bank of Korea.

The prosecution had requested a fine of 100 million won for Woori Bank in the closing arguments.

The court ruled Woori Bank innocent of all charges. The reason was that the dual punishment provision could not be applied because Woori Bank was not the beneficiary of the profits from the violating act.

The court stated that the purpose of the dual punishment provision is to punish not only the actual perpetrator of the violating act but also the entity that benefits from the act if they fail to comply with the reporting obligation, and ruled that "Woori Bank is not subject to the dual punishment provision."

Furthermore, regarding the charge of failing to fulfill the duty to verify the responsible employees, the court stated, "Judging that 'they did not verify whether it was reported' merely because an employee did not check supporting documents is an excessive analogical or expansive interpretation of criminal statutes and violates the principle of legality."

The court ruled that it could not be considered that Woori Bank should have verified the transactions, given that the employees in question believed they were remitting import payments for goods that did not require reporting or permission.