South Korean prosecutors are currently investigating two cryptocurrency exchanges, UpBit and Bithumb, as part of an ongoing probe into lawmaker Kim Nam-kuk’s transactions. Local media sources have reported that the Seoul Southern District Prosecutor’s Office has obtained Kim’s account information from both exchanges to examine his transaction history and funding sources.
Furthermore, prosecutors have also issued a warrant to the Kakao messaging app due to the lawmaker’s use of its Klip wallet for certain crypto transactions. The country’s primary financial regulator reported Kim to the prosecutors after receiving information from UpBit. It was discovered that the lawmaker had transferred 800,000 WEMIX tokens worth 6 billion won ($4.5 million) from UpBit to Bithumb between late February and early March 2022.
The revelation has raised concerns regarding potential conflicts of interest since Kim had co-sponsored a bill in 2021 to amend the Income Tax Act, aiming to eliminate taxes on virtual assets. While investigations have been ongoing since the previous year, earlier attempts to obtain search and seizure warrants were denied by the court. However, the prosecution succeeded on their third attempt by strengthening their charges.
According to reports, the prosecutors included charges such as violating the Political Funds Act, concealing criminal proceeds, and tax evasion in the search and seizure warrants submitted to the exchanges. In the meantime, Kim, who was a member of South Korea’s main opposition party, the Democratic Party, has resigned from the party and is now an independent lawmaker. Kim has denied any violation of the law, stating that lawmakers are not required to disclose their cryptocurrency transactions. It’s worth noting that WEMIX was delisted from major South Korean exchanges in November 2022.