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South Korean prosecutors raided crypto exchanges, including Upbit and Bithumb, on May 15 as part of an ongoing investigation into lawmaker’s undisclosed crypto holdings. In the meantime, the lawmaker, Kim Nam-kuk, said he is leaving Democratic Party to relieve his fellow members from the pressure of the investigation.
Accused S. Korean Lawmaker Leaves Democratic Party
Prosecutors in South Korea took action on Monday in the wake of recent reports that revealed that former lawmaker Kim Nam-kuk held millions of dollars in undisclosed crypto funds. According to Yonhap, prosecutors searched major local exchanges, including Upbit and Bithumb. Other services, such as messaging app Kakao, were also investigated, as Kim previously used the platform’s crypto wallet.
On the same day, Kim announced his decision to leave the Democratic Party. However, he denied the accusations again and said he would continue to prove his innocence.
South Korean lawmaker Kim Nam-kuk has announced his departure from the Democratic Party over his alleged crypto dealings while legislating on digital assets. The politician said he would continue fighting to prove his innocence independently.
“I will stand up to the end to unfair political offenses and reveal the truth.”
– Kim wrote in a post on Facebook.
He said he departed from the party because the move would soothe the pressure on other party members amid the controversy. Meanwhile, he slammed the media in S. Korea for publishing reports on his crypto holdings. According to Kim, the reports were factually incorrect.
Investigation Over WEMIX Holdings
Kim’s departure and prosecutors’ search of crypto exchanges come just a week after local outlets reported that Kim was being investigated in 2022 over accusations that he held 6 billion won (US$4.5 million) in undisclosed crypto assets.
The reports stated that the former lawmaker held roughly 800,000 WEMIX tokens in his crypto wallet between January and February 2022. The politician then withdrew all funds from his wallet before the government introduced the travel rule that required crypto service providers to reveal the identities of investors who recorded more than 1 million won in trading activity.
But the main issue is that Kim’s 6 billion won in crypto assets were not reported through the regular financial asset disclosure that top government officials and lawmakers are subject to. After prosecutors’ search on Monday, Korea’s ruling People Power Party said it would establish an internal task force to probe Kim’s cryptocurrency transfers.
Should other governments also be concerned about the potential misuse of cryptocurrency by lawmakers and public officials? Let us know in the comments below.