Key takeaways:
- South Korean prosecutors searched the offices of two crypto exchanges as part of their inquiries into the legislator Kim Nam-kuk’s digital assets.
- Since there is no requirement for parliamentarians to register their cryptocurrency transactions, the lawmaker has denied breaking any laws.
In South Korea, prosecutors searched the offices of two local cryptocurrency exchanges as part of their inquiries into the legislator Kim Nam-kuk’s digital assets.
A team of attorneys from the Seoul Southern District Prosecutors Office reportedly searched Upbit and Bithumb’s cryptocurrency exchanges to obtain Kim’s account information to examine his transaction history and financing source. This information was reported by the South Korean news agency Yonhap. Additionally, since the lawmaker used the Kakao messaging service’s Klip wallet for certain cryptocurrency transactions, prosecutors sent a search warrant for it. According to reports, Kim uses Upbit and Bithumb to manage his digital asset wallets.
Kim’s resignation from his political party on May 14 was promptly followed by an official raid. His dismissal is connected to several accusations against him over allegedly questionable cryptocurrency transactions made between May 2022 and November 2022 when he was working on digital asset legislation.
Based on information from Upbit, the country’s primary banking regulator informed the prosecutors about Kim. Between late February and early March of 2022, the lawmaker moved 800,000 WEMIX tokens worth 6 billion WON ($4.5 million) from Upbit to Bithumb. Given that Kim had co-sponsored a plan to change the Income Tax Act in 2021, the discovery raised questions about a potential conflict of interest. The legislation aimed to get taxes off virtual assets.
The court rejected earlier attempts to get the search and seizure orders, despite the fact that investigations had been ongoing since last year. But after bolstering its accusations, the prosecution was successful on the third try.
Reports state that the search and seizure orders sent to the exchanges included allegations like breaking the Political Funds Act, hiding illicit proceeds, and tax evasion.
The former legislator claimed in a Facebook post that he did not want the scandal surrounding his cryptocurrency operations to “burden” his fellow party members. He added in the same post that the media’s accusatory stories contained “false facts” and that he would “reveal the truth.” Since there is no requirement for parliamentarians to register their cryptocurrency transactions, the lawmaker has denied breaking any laws.
Kim’s Bitcoin transfers will be looked into by an internal task force, according to the governing People Power Party, which announced it would do so on Monday. Together with Rep. Kim Sung-won, Rep. Yun Chang-Hyeon, chair of the special commission on digital assets, will lead the task force.
Representative Kim Nam-Kuk of South Korea’s biggest opposition party, the Democratic Party (DP), has agreed to sell his bitcoin holdings in response to the DP’s request. Due to allegations of possible malfeasance and a considered conflict of interest caused by his large stakes in virtual currency, this decision was made.
