Further Punishment Awaits South Korean Civil Servant Who Stole $416k to Buy Crypto

South Korea’s Board of Audit and Inspection has urged officials in the city of Cheongju to dish out “strict disciplinary action” to a civil servant who stole over $416,000 worth of public funds to spend on personal crypto investments .

Per Dongyang Ilbo , the unnamed official worked at Cheongju City Hall and was in charge of student-related funds and subsidies.

South Korean Civil Servant ‘Started Stealing Public Money to Buy Crypto in 2018’

The board says the official “embezzled approximately 600 million won [$416,244]” over a seven-year period and “invested it in cryptoassets.”

Cheongju City Hall, in Cheongju, North Chungcheong Province, South Korea. (Source: hyolee2 [CC BY-SA 3.0])

The official has already been charged and convicted of criminal charges related to the same offense.

However, the board has the power to issue further punishments to public employees.

The civil servant reportedly began siphoning money out of the city’s budget and other public funds in 2018.

The board noted that the official “forged documents” to make it look as though they had set aside the funds as “subsidies for student work experience.”

The official also “wrote bogus applications” from “university students” claiming they were seeking “public service work.”

However, the official instead “embezzled the money” and used it to buy unnamed cryptoassets on major crypto exchanges .

The South Korean Board of Audit and Inspection. (Source: MBC News/YouTube/Screenshot)

Superiors Face Warnings, Pay Cuts

The board also recommended that the city take “light disciplinary action” against five of the official’s superiors.

This group comprises several middle managers and section chiefs “responsible for management and supervision.”

In South Korea, “strict” disciplinary action for public officials involves dismissal, demotion, or suspension.

Such cases are rare in a country where civil service jobs are traditionally much sought-after due to their generous pension allowances and high levels of job security.

However, dismissed public officials can lose out on these, with their retirement allowances and public pensions reduced by 50%.

“Light disciplinary action,” for South Korean civil servants, typically involves salary cuts and official reprimands.

Crypto Fuelling a Rise in Embezzlement Cases, Claims Expert

The city could also hit the same official could also be hit with further fines. Public officials who embezzle or misappropriate public funds can also be forced to pay “disciplinary surcharges” worth “up to five times the amount of money embezzled or misappropriated, in addition to disciplinary action,” the media outlet wrote.

The news comes hot on the heels of a prosecution service report that showed an annual rise of 29% in the number of embezzlement cases the service handles .

An expert told the South Korean media that amid ongoing “economic uncertainty,” a rising number of employees “have been tempted into making speculative investments in stocks, gambling, and cryptocurrencies.”

Prosecutors this month announced they had indicted a serving attorney on a range of embezzlement and fraud charges.

The prosecution service says the lawyer and five others ran a $7.9 million “scam coin” sales platform .

Cheongju is the capital and biggest city in the central North Chungcheong Province. Back in 2022, police in the city arrested a 22-year-old military conscript for selling fake concert tickets to online customers to fuel his crypto-trading addiction .