Last Updated: 24 July 2022
A South Korean official who manages public funds for amateur sports has admitted to embezzling €360,000 to buy bitcoin. According to local media, the official in question is now being prosecuted by police in the town of Mokpo in the southwestern part of the country.
Not once, not twice, but 20 times
The fact that the official transferred public money to her husband in 20 different transactions shows that this was not an isolated incident. Her colleagues detected the fraud because of a few irregular and unrecognised deposits and withdrawals from the account. A large part of these were marked as “expenses,” without it being clear where exactly the money was going.
In the end, it turned out to be the account of the official’s husband. The pair then bought bitcoin with the money and gambled the rest on the internet. This unusual situation began in March 2022 and lasted no longer than four months.
After one member of the accounting team suddenly stopped turning up, some alarm bells went off. During questioning by the police, the woman then immediately confessed that she had stolen public funds. She was an employee of the Mokpo Sports Council, which pays the fees of many amateur and semi-professional teams in the city.
Council in trouble
The incident got the Mokpo Sports Council into trouble. Because of the stolen funds, it could no longer pay the salaries of some coaches and other staff members of the sports teams. The woman says she circumvented internet detection systems by using known holes in the system.
The woman and her husband will not have had much success with the stolen funds. Bitcoin has seen some serious upheavals during this period. The decision to gamble with the rest of the money also gives little hope to the duo. It is likely that they got themselves into serious debt with this action.
Buying Bitcoin with stolen money
This is certainly not the first time we have heard of someone buying bitcoin with stolen money. A former employee of a sister company of Sony made a big deal out of it. In 2021, the man in question managed to withdraw $154 million (about 150 million euros) from Sony’s accounts and then use it to buy bitcoin. In total, the man bought 3,879.16 bitcoin with the amount.
The FBI was able to trace the bitcoin transactions in question and in cooperation with Citibank and the Japanese authorities, was eventually able to obtain the private key. That was the key to the funds, which could ultimately all be recovered. The former Sony employee was subsequently tried in Japan.
Acting US Attorney, Randy Grossman, came up with an interesting statement about the case at the time. “Criminals need to pay attention: You cannot rely on cryptocurrency to hide your black money from the government.” This is something the media still regularly gets wrong. In some cases, Bitcoin may be digital money that can be used with a fair degree of privacy, but the public transaction history punishes every little mistake you make harshly.