South Korean lawmaker Kim Nam-kuk, from the Democratic Party, is being investigated by local authorities due to questionable cryptocurrency transfers. It is worth noting that Kim Nam-kuk had previously supported a bill aiming to delay the taxation of cryptocurrency profits.
South Korea’s financial watchdog has alerted local prosecutors about a string of cryptocurrency transactions made by a lawmaker from an opposing political party. This revelation has caused public anger within the country due to concerns about a possible conflict of interest.
According to CoinDesk Korea, it has been reported that Representative Kim Nam-kuk from the Democratic Party of Korea made withdrawals of 800,000 WEMIX tokens from late February to early March 2022. These transactions were then reported to the Financial Intelligence Unit (FIU) of the Financial Services Commission. It is worth noting that Representative Kim had WEMIX holdings valued at 6 billion won ($4.5 million) during the period between January and February 2022.
The Financial Intelligence Unit (FIU) deemed the withdrawals as suspicious transactions and notified the prosecutor’s office, as per the report.
After Representative Kim’s reported withdrawals, South Korea implemented the travel rule set by the global standard-setter FATF on March 25, 2022. The travel rule mandates that exchanges gather personal information regarding transactions and report them to authorities if they surpass a specific threshold.
According to the report, Kim stated that he did not convert his tokens into cash and did not break any laws. It is also mentioned that South Korea’s Public Service Ethics Act does not include any reporting obligation for virtual assets.
WEMIX, the cryptocurrency in question, was removed from major exchanges in South Korea last year due to allegations of providing inaccurate information about its circulating supply. The issuing company, WeMade, attempted to contest the delisting in court but was unsuccessful.
According to CoinDesk Korea, Kim had supported a proposed change to the Income Tax Act in July 2021. The proposed amendment included a provision to postpone the taxation of virtual assets.
South Korea has decided to delay the implementation of taxes on cryptocurrency income and income derived from the “transfer or lending” of virtual assets until 2025.
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