South Korean official diverted $342,000 in public funds for crypto

New evidence has revealed the extent of a South Korean civil servant’s embezzlement scheme, involving the theft of $342,000 (497.16 million Korean won) in public funds for cryptocurrency investments.

The unnamed official, referred to as Person A, used forged documents and misused the mayor’s seal to open a bank account in Cheongju City Hall’s name, enabling the diversion of funds over six years from November 2018 to May 2023.

According to the Board of Audit and Inspection (BAI), the stolen money included local subsidies, city project budgets, and even flood recovery donations meant for areas devastated by severe flooding in July 2023.

North Chungcheong Province, where Cheongju is located, suffered significant losses during the disaster, with 19 fatalities reported.

The official’s actions were uncovered during an audit report released on March 12, which detailed how they bypassed oversight by falsifying project expenses and processing unauthorised electronic approvals.

The BAI also noted that the mayor’s seal and other official seals were left unsecured, enabling repeated misuse.

In December 2024, Person A was sentenced to five years in prison for these crimes.

However, the case is now under review in the High Court, where the sentence could be extended or overturned.

The BAI has recommended further disciplinary action against other officials who failed to oversee proper accounting procedures.

This case highlights broader issues of transparency and accountability in South Korea’s public sector.

Experts have linked rising embezzlement cases to speculative investments in cryptocurrencies and weak financial oversight systems.

In 2023 alone, South Korea reported nearly 4,000 cases of embezzlement and breach of trust, a 29% increase from the previous year.

Cheongju City Hall has been instructed to dismiss the implicated official and strengthen internal controls to prevent similar incidents.

As South Korea ramps up its efforts to combat crypto-related crimes with a permanent investigative task force, this case underscores the need for stricter safeguards in managing public funds.