A series of cryptocurrency transactions by a legislator from an opposition party has been submitted to local prosecutors by South Korea’s financial watchdog, which has caused a domestic uproar over a possible conflict of interest. Representative Kim Nam-kuk of the main opposition Democratic Party of Korea (DPK) is under scrutiny for questionable cryptocurrency transactions totalling 6 billion won ($4.54 million).
Prior to March 2022, when Korea implemented the crypto travel law requiring real-name crypto transactions, Kim was accused of liquidating his cryptocurrency holdings. Kim refuted the allegations, saying that the majority of his cryptocurrency holdings were moved to another exchange rather than paid out.
Reports indicate that Democratic Party of Korea representative Kim Nam-kuk transferred 800,000 WEMIX tokens between the end of February and the beginning of March 2022, and the Financial Intelligence Unit (FIU) of the Financial Services Commission was informed of the activities. Between the first two months of 2022, Kim’s WEMIX assets totaled 6 billion won ($4.5 million).
The gaming business Wemade developed the cryptocurrency known as Wemix, which debuted on Bithumb in October 2020. After being listed for two years and two months, it was delisted on December 8 of last year. The highest price ever traded on Bithumb was 29,450 won on November 22, 2021.
According to reports from the 7th of this month, Rep. Kim Nam-guk stated, “I transferred (the Wemix currency I had) to another exchange wallet. Since the price of the other coins that were bought with the transferred money has decreased, there are now just a few hundred million won rather than 6 billion won. There is no indication that any laws have been breached,” he said, adding, “I’m arranging my account in preparation for disclosing tomorrow.”
The government’s People Power Party increased its condemnation of Kim over his shady cryptocurrency trading. PPP spokeswoman Rep. Yoo Sang-bum stated, “The public is shocked by his ambivalent attitude and attempts to win sympathy by highlighting his cheap shoes, even though he held crypto assets worth 6 billion won.”
Daegu Mayor Hong Joon-pyo expressed his contempt against the accused by stating, “This is a serious moral hazard. He appeared to have had a get-rich-quick scheme with crypto trading. He should have left his job as a lawmaker and focused on speculative trading instead. On top of that, he stood at the forefront of delaying crypto taxation, which can be seen as an abuse of his legislative power for the protection of his private assets.”
Along with a number of other MPs from the opposition party, Kim is also facing criticism for putting out a measure in 2021 that would defer taxing cryptocurrency earnings. Yoo Sang-bum bashed Kim for the bill by stating, “I am angry at the shamelessness of not even apologising to the public for the conflict of interest issue of proposing a coin tax deferral bill while holding coins.” Reflecting on the bill proposed by Rep. Woong-rae Noh of the same party, Kim said, “I did not participate when the bill was voted on, and the law was not implemented.” With the legislative elections coming up next year, it is a crucial time for DPK to gain public trust. However, it will be a tough year for the party to be on the good side of the public with all the ongoing accusations against them.