Recruits concentrated from special investigation, probe planning and financial police units

Upbit, the virtual asset exchange operated by Dunamu. [Dunamu]
Upbit, the virtual asset exchange operated by Dunamu. [Dunamu]

Dunamu, the operator of South Korea's largest virtual asset exchange, hired 33 former Financial Supervisory Service officials over the past five years, according to data obtained by The Herald Business. The FSS is the primary regulatory body overseeing digital asset exchanges.

The data, obtained Tuesday through the office of Rebuilding Korea Party lawmaker Kim Hyeong-yeon from the Public Service Ethics Committee's employment review records for FSS retirees, showed that Dunamu brought on 33 FSS employees between 2021 and August this year.

The hiring began in 2021, when a senior official from the FSS fintech field advisory group (Grade 2) joined Dunamu as head of its customer protection division. In October 2022, four more officials followed — from the Special Investigation Bureau (Grade 4), the Investigation Planning Bureau (Grade 4) and the Capital Markets Special Judicial Police unit (Grade 4, two officials) — all joining as in-house lawyers.

The recruitment continued in waves. In February 2024, officials from the Accounting Planning and Supervision Division (Grade 4), the Human Resources Development Division (Grade 4), the Capital Markets Special Judicial Police (Grade 4), the Investigation Planning Bureau (Grade 4) and the Public Relations Division (Grade 4) joined as staff members; officials from the Accounting Investigation Bureau (Grade 3), the Audit Division (Grade 3), the Daegu and North Gyeongsang Province branch (team leader, Grade 3), the Financial Investment Inspection Bureau (team leader, Grade 3) and the Accounting Review Bureau (team leader, Grade 3) joined as division heads; and in August 2024, officials from the Capital Markets Special Judicial Police (Grade 4), the Asset Management Inspection Bureau (Grade 4), the Financial Investment Inspection Bureau 2 (Grade 4) and the Supervision Coordination Bureau (Grade 4) joined as general staff.

Dunamu consistently added FSS personnel in subsequent months. In June last year, officials from the Savings Bank Inspection Bureau (Grade 4), the Accounting Review Bureau (Grade 4), the Accounting Supervision Bureau 1 (Grade 4) and the Short Selling Special Investigation Team (Grade 3) moved to Dunamu as division heads. Officials from the Asset Management Supervision Bureau (Grade 4), the Planning and Investigation Bureau (Grade 4) and Investigation Bureau 1 (Grade 4) took on team leader roles.

In October of the same year, senior FSS officials from the Financial Investment Inspection Bureau (Grade 2, team leader), the Asset Management Inspection Bureau (Grade 2, bureau director) and the Financial Education Bureau (Grade 2) joined Dunamu's trading support deliberation committee as non-standing members. Officials from the Investigation Planning Bureau (Grade 5), the Sanctions Review Bureau (Grade 5), the Capital Markets Special Judicial Police (Grade 4) and the Financial Investment Inspection Bureau 2 (Grade 4) also took on roles as compliance monitoring team leaders.

The hiring spanned multiple key FSS units simultaneously, including the Special Investigation Bureau, the Investigation Planning Bureau, the Capital Markets Special Judicial Police and the Asset Management Supervision Bureau.

The concentrated recruitment came particularly after criticism over the issuance of low-quality coins was raised during the 2021 national audit.

Dunamu said it "is strengthening its internal controls and compliance monitoring framework," adding that the hiring of former FSS officials "is part of an effort to secure personnel with expertise in relevant fields."

Lawmaker Kim said the data showed that FSS personnel who should be overseeing virtual asset exchanges have been moving to Dunamu in succession. "We need to examine whether Dunamu has been more focused on recruiting former regulators than on protecting users, especially at a time when users are suffering losses from delistings," Kim said.

Meanwhile, according to public disclosures, Dunamu's executive roster includes inside director Lim Ji-hoon, who serves as chief strategy officer and is a former FSS official, and outside director (non-standing) Do Gyu-sang, head of the Kim & Chang Global Financial Strategy Research Institute and a former vice chairman of the Financial Services Commission.


ko@heraldcorp.com