The Ethics Investigation Advisory Committee of the South Korean government has reportedly convened to discuss potential disciplinary measures against National Assembly member Kim Nam-kuk for alleged conflicts of interest involving cryptocurrency trades and related legislation.
According to a June 26 report from The Korea Times, the advisory committee has held three meetings following allegations Kim traded roughly 6 billion won — more than $4.5 million at the time of publication — in WEMIX tokens amid the government implementing policies that could have impacted the price of crypto assets. As a member of South Korea’s National Assembly, Kim had some authority in handling laws related to digital assets, reportedly backing legislation proposing a 20% tax on crypto gains be deferred from 2023 to 2025.
Following news of Kim’s alleged involvement in the crypto trades, he left the Democratic Party of Korea and policymakers passed a law requiring the disclosure and registration of crypto assets by certain government officials. In a June 24 Facebook post, Kim said he had submitted certain materials to the ethics committee following a request, but the “full transaction history” of his alleged cryptocurrency trades was not among them.
Amid the allegations, South Korean authorities raided the offices of crypto exchanges Upbit and Bithumb for transaction records and other materials reportedly related to Kim’s holdings. Prosecutors had already ordered the arrest of Bithumb owner Kang Jong-hyun in February over alleged embezzlement following a January office raid by tax authorities.
Individuals and companies connected to South Korea have had a major impact on events in the crypto space in the last year. In 2022, the collapse of Terraform Labs and the depegging of its TerraUSD (UST) stablecoin may have contributed to the crypto crash resulting in several related bankruptcies and loss of market capitalization. On June 19, Montenegrin authorities sentenced former Terra CEO Do Kwon to four months in prison for using a false passport — and he may still face extradition to South Korea and the United States.