- Offices of crypto exchanges Bithumb and Upbit were raided by South Korean prosecutors shortly after Kim Nam-kuk announced his exit from the Democratic Party.
- The prosecutors suspected Kim Nam-kuk was using the two crypto exchange wallets to store his digital assets.
- The resigned lawmaker liquidated $4 million before the government implemented the “Travel Rule.”
Offices of two crypto exchanges suspected of being involved with politician Kim Nam-kuk were raided shortly after the lawmaker’s departure, who was accused of committing illicit crimes by the South Korean prosecutors.
On May 15, a group of investigators from the Seoul Southern District Prosecutors Office invaded the offices of Bithumb and Upbit in search of transaction records about Kim Nam-kuk.
According to a report by Yonhap, a local news media, the raid occurred because of the investigation of the lawmaker and his digital assets. The lawmaker was accused of holding 800,000 Wemix coins in 2021 ($4.5 million or 6 billion won). There have been suspicions about how the lawmaker made so much.
Following the lawmaker’s resignation on May 14, the prosecutors took no time to carry out their duties. The authorities viewed Kim’s actions concerning cryptocurrencies as illegal while he worked on virtual asset legislation in 2022. The first-term politician has been accused of trading cryptocurrencies while in attendance at two meetings of the judiciary committee of the National Assembly.
On May 14, Kim Nam-kuk took to Facebook to announce his departure from his political party—Democratic Party— claiming he did not want to burden the party members or cause any damage to them with his actions.
Kim Nam-kuk stated that there had been “false facts” published about him by the media, and he would reveal the truth, take complete legal responsibility, and confront these allegations.
A report by The Korea Times on May 8 claimed that the politician had liquidated cryptocurrency assets worth $4 million before enforcing the Travel Rule by the Financial Action Task Force. Kim Nam-kuk denied ever cashing out his virtual investments; instead, he claimed to have moved them to another exchange.
These recent incidents in the South Korean crypto industry result from the authorities clamping down on crypto activities in the country.
One of the crypto exchanges believed to be involved with Kim—Bithumb—has been under investigation by South Korean regulators due to the morbid incidents within the crypto exchange.
One of Bithumb’s most prominent shareholder executives, Mr. Park Mo, was found dead at his home in December 2022 after an investigation against him by South Korean prosecutors commenced.
Mr. Park Mo had been accused of allegedly embezzling funds at the crypto exchange’s affiliated firms and manipulating stock prices.
Conclusion
The clampdown on crypto-related activities in South Korea has revealed the corruption surrounding government officials and companies affiliated with cryptocurrencies. Recently, the Bank of Korea was granted the right to open investigations on any crypto-related firms.
