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A recent scandal involving a South Korean opposition party lawmaker has sparked domestic outrage over potential conflicts of interest. The country’s financial watchdog has reported a series of crypto transactions by the lawmaker to local prosecutors, raising concerns about the transparency and ethics of political figures in the crypto industry.
WEMIX token transactions under scrutiny
South Korean lawmaker Rep. Kim Nam-kuk from the Democratic Party of Korea has been accused of carrying out suspicious crypto transactions, as per reports by the country’s financial watchdog. The transactions involved the withdrawal of 800,000 WEMIX tokens between late February and early March 2022.
During the same period, Kim’s total WEMIX holdings were valued at 6 billion won ($4.5 million). The Financial Services Commission’s Financial Intelligence Unit (FIU) flagged the transactions as suspicious and reported them to the prosecutor’s office.
Lawmaker Kim Denies Breaking Laws
After South Korea introduced the Financial Action Task Force’s (FATF) travel rule on March 25, 2022, exchanges are now obligated to gather personal information on transactions and notify authorities if they surpass a specific limit. Following the news of Rep. Kim Nam-kuk’s 800,000 WEMIX token withdrawal, the Financial Intelligence Unit (FIU) reported the transactions as suspicious activity.
However, Kim claims that he did not breach any laws or sell his tokens, and there are no reporting guidelines for cryptocurrencies under South Korea’s Public Service Ethics Act.
The issuing company of WEMIX, WeMade, challenged the delisting of the cryptocurrency from major exchanges in South Korea after being accused of reporting inaccurate circulation supply figures. However, the challenge was unsuccessful.
It was reported that in July 2021, Kim co-sponsored an amendment to the Income Tax Act which deferred taxation on virtual assets. South Korea postponed plans to tax income from cryptocurrency as well as income from the transfer or lending of virtual assets until 2025.
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