Why is money laundering problematic?
Host: Director Han Chi-ho
Guest: Pureun “Ian” Hong, managing partner at Decent Law Firm
Q. What is money laundering?
- Money laundering is the process of concealing the illegal origin of funds to make them appear legitimate.
Q. What is the origin of the term "money laundering"?
- The term originates from the 1920s in the U.S. when organized criminals like Al Capone used laundromats to disguise income from illegal activities such as gambling and alcohol sales as legitimate earnings.
- The term "money laundering" was officially used to define illegal financial transactions in the U.S.
Q. Why is money laundering problematic?
- It allows the use of illegal funds.
- Virtual assets are increasingly used as a tool for money laundering.
Q. Are there examples of cryptocurrency being used for money laundering?
- Cryptocurrencies have been used to launder money from drug-related crimes.
Q. What are some real examples of drug dealers laundering money?
- Drug dealers use cryptocurrency for payments, often facilitated by platforms like Telegram.
- They launder funds using methods such as mixing and OTC (Over-The-Counter) transactions.
Q. What are "mixing" and "OTC" in the context of money laundering?
- Mixing: A process where cryptocurrency transactions are mixed to make the transaction history difficult to trace. It involves using multiple wallets to split and combine coins.
- OTC: Refers to purchasing cryptocurrencies outside of traditional exchanges.
Q. Is money laundering through OTC platforms an issue?
- In the past, OTC platforms were used for legitimate cryptocurrency transactions.
- Currently, they are often exploited for money laundering purposes.
Q. How do drug dealers use OTC platforms for money laundering?
- They launder money by selling cryptocurrency obtained through illegal activities.
Q. Are there other examples of cryptocurrency being used for money laundering?
- Transferring bank accounts to others can result in violations of the Electronic Financial Transactions Act.
- Cases have arisen where shell bank accounts and cryptocurrencies were used for money laundering.
Q. Are there real cases of shell bank accounts being used for money laundering?
- A group including a corporate executive was arrested for using shell accounts to launder money.
- The police warned that transferring bank accounts to others is illegal.
- There have been cases where cryptocurrencies were purchased via credit card transactions on foreign exchanges and converted to cash through OTC platforms.
Q. How are OTC platforms regulated?
- They can be punished under Article 17, Paragraph 2 of the Special Financial Information Act.
Q. Are there other cases of cryptocurrency being used for money laundering?
- "Kim Nam-guk reportedly converted ₩3 billion ($30 million) through cryptocurrency exchanges, raising suspicions of money laundering."
- Prosecutors have launched an extensive investigation into the 'Kim Nam-guk coin allegations.'
- Illegal funds and bribery of public officials, along with other criminal activities, are often facilitated by cryptocurrency.
Q. What are the problems with using cryptocurrency for money laundering?
- The government is working to regulate cryptocurrency money laundering activities.
