Key Takeaways
- Prosecutors allege he omitted crypto holdings amounting to 9.9 billion won from his financial disclosures
- Kim allegedly converted undeclared crypto earnings into other digital tokens and transferred them into bank accounts.
South Korean lawmaker Kim Nam-kuk is facing potential imprisonment over allegations of failing to disclose crypto holdings during mandatory asset declarations in 2021 and 2022. Prosecutors have requested a six-month prison sentence for Kim, citing concerns over transparency and ethical conduct for public officials.
As per local media reports, Kim, who previously served as a member of the Democratic Party, declared assets worth 1.2 billion Korean won (approximately $835,000) in 2021. However, prosecutors allege he omitted crypto holdings amounting to 9.9 billion won (roughly $6.8 million) from his financial disclosures. The following year, Kim is accused of concealing an additional 990 million won (about $689,000) worth of digital assets, further compounding the charges.
Prosecutors claim that Kim knowingly obscured the full extent of his financial holdings, thereby undermining the oversight responsibilities of the National Assembly Ethics Committee. The concealed assets, they argue, raise significant concerns about potential conflicts of interest, particularly given Kim’s involvement in legislative discussions concerning digital asset policies during his time in office.
In addition to failing to disclose these holdings, Kim allegedly converted undeclared crypto earnings into other digital tokens and transferred them into bank accounts. These transactions reportedly aimed to obscure the origin and scale of his wealth, adding another layer of complexity to the allegations.
Kim’s financial practices have drawn heightened scrutiny, particularly given his previous role in shaping policies related to crypto regulation. As a lawmaker, he was involved in discussions about postponing a 20% tax on crypto gains, originally set to take effect in 2023. The implementation was delayed to 2025 and later further postponed to 2027
Kim resigned from the Democratic Party in 2023 following allegations that he liquidated significant cryptocurrency holdings just before South Korea implemented the Financial Action Task Force’s (FATF) Travel Rule. This rule introduced stricter measures for tracking and reporting virtual asset transactions.
Kim defended his actions by claiming the funds were transferred to another exchange and that existing regulations did not mandate their disclosure. However, these explanations have done little to mitigate the accusations against him.
Prosecutors argue that Kim’s actions demonstrate a disregard for ethical responsibilities, calling for a prison sentence as a deterrent to similar misconduct. They emphasize that such violations erode public trust in elected representatives and undermine efforts to ensure transparency in financial practices.
