A Korean court has found foreigner-only casino operator Paradise Co and two employees accused of violating the Foreign Exchange Transactions Act not guilty, ruling it is not their responsibility to determine how customers obtained their funds or brought money into the country.
According to a report by local media outlet Chosun Biz, the case revolved around the failure of the employees, who are in charge of casino currency exchange operations at Paradise, failed to fulfill their duty to check whether the funds involved in customer foreign exchange transactions were subject to reporting or approval under the Foreign Exchange Transactions Act.
For one of those employees, the prosecution focused on the exchange of KRW 39.3 billion across 607 transactions between June 2022 and December 2023, and for the other employees the exchange of KRW17.7 billion over 209 transactions between August 2019 and March 2020. Paradise was also included in the indictment.
However, Chozun Biz said that Criminal Division 19 of the Seoul Central District Court last week acquitted Paradise and the employees, finding that prosecutors interpreted the scope of obligations under the Foreign Exchange Transactions Act too broadly.
The court stated that although exchange staff have basic identity verification duties such as checking a customer’s passport, it is “difficult to conclude” that they are responsible for scrutinizing and confirming whether the funds are the customer’s own or a proxy transaction.
It also said the duty to verify should not be expansively interpreted to cover the circumstances of fund acquisition or the process of bringing the money into the country prior to the exchange.
“Before directly engaging in a transaction with a customer, exchange staff cannot be deemed to have a reporting duty concerning how the customer obtained or brought in the currency,” the court stated. “Based on the evidence submitted by the prosecutor, it is insufficient to find that the defendants violated their job-related verification duties.”
Paradise issued a statement to the media outlet in which it said, “During the Korea Customs Service’s regular 2024 inspection, there was a difference in legal interpretation over the scope of an exchange operator’s verification duty, which led to this lawsuit. With this ruling, we have confirmed that the exchange operation process has been conducted appropriately within the legal framework.”
Paradise operates three casinos in Seoul, Busan and Jeju as well as holding a controlling 55% stake in Incheon integrated resort Paradise City – a joint venture with Japan’s Sega Sammy Holdings.
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