In recent news, prosecutors in South Korea conducted a raid on local cryptocurrency exchanges Upbit and Bithumb in connection with investigations into the digital assets of lawmaker Kim Nam-kuk. This intriguing development immediately followed Kim’s resignation from his political party on May 14, amid allegations of suspicious crypto dealings during his time working on digital asset legislation in 2022.
Kim took to Facebook to address his resignation, stating that he did not want to impose a burden on fellow party members due to the controversy surrounding his crypto dealings. In the same post, he cited “false facts” in media reports and his intention to reveal the truth.
One of the key points being considered in this case is Kim’s apparent liquidation of over $4 million in crypto before the Financial Action Task Force enforced the “Travel Rule.” Allegedly, Kim supported a bill that would postpone the 20% capital gains tax on cryptocurrencies from 2023 to 2025. However, Kim contesting allegations, claimed that he transferred his digital assets to another exchange rather than cashing them out, and as a lawmaker, he was not obliged to report such activity.
Notably, in 2021, Kim is said to have owned nearly 800,000 Wemix coins (worth $4.5 million), according to Yonhap reports.
Among the raided exchanges, Bithumb has been facing scrutiny from local regulators. In December 2022, the exchange’s largest shareholder executive was found dead after being accused of embezzlement and stock price manipulation. Shortly thereafter, in January, Bithumb’s offices were raided, and its owner arrested on charges that included embezzlement, fraudulent transactions, and dereliction of duty.
Another noteworthy development in South Korea’s stance toward cryptocurrencies involves the country’s increasing crackdown on local crypto activity. On April 24, the Bank of Korea — South Korea’s central bank — was granted authority to investigate operators of cryptocurrency-related businesses. This new power enables banks to request access to crypto transaction data from exchanges operating within the country.
Furthermore, two days later, legislators in South Korea passed an initial review of cryptocurrency regulation proposals. The proposed regulations include strict sentencing recommendations and the authority for the Financial Services Commission to investigate and supervise any “digital asset”-related activities.
In conclusion, the recent events unfolding in South Korea demonstrate the nation’s continued efforts to regulate and monitor cryptocurrency activity. This, in turn, highlights the dichotomy between fostering the growth of the crypto market while ensuring its legal compliance and user safety. With authorities demonstrating a proactive approach in their crackdown, the global audience may wonder whether other countries will follow suit, thus posing interesting questions for the future of cryptocurrencies.
Source: Cointelegraph
