South Korean Lawmaker Cleared in High-Profile Crypto Scandal

A South Korean lawmaker, Kim Nam-kuk, was recently cleared of allegations that he “concealed” cryptocurrency assets. The case centered on whether South Korea’s laws at the time of the alleged concealment required him to declare his holdings.

According to latest report from South Korean local news media Chosen Biz, Judge Jeong Woo-Yong of the Southern Seoul District Court found that virtual assets were not subject to mandatory disclosure under the Public Service Ethics Act during the period in question.

Detailing The Background Of The Case

Kim was accused of failing to report cryptocurrency profits amounting to roughly $4.5 million before South Korea began enforcing the Financial Action Task Force’s “Travel Rule,” which requires asset disclosure. The Chosen Biz report read:

Kim is accused of transferring part of the deposits in his virtual asset account just before the standard date (December 31 each year) during the 2021-2022 National Assembly asset declaration period to a bank deposits account in order to match the total asset aggregates similar to the previous year, and using the remaining deposits to purchase coins.

Notably, critics have alleged that Kim’s actions were intended to obstruct the National Assembly’s Ethics Committee from accurately reviewing lawmakers’ financial disclosures.

However, the court determined that there was “insufficient evidence” to prove deliberate interference or that Kim had a legal duty to disclose his cryptocurrency holdings. Reporting this, the local news media wrote:

Judge Jeong Woo-yong of the 9th Criminal Division of the Southern Seoul District Court pronounced Kim not guilty of the charges of obstructing public duty by deceit from 2 p.m. that day.

It is worth noting that this ruling concluded a case that had sparked significant political and public scrutiny, leading Kim to step away from the Democratic Party to alleviate the controversy’s impact on his colleagues.

Legal Context and Political Implications

Judge Jeong noted that while Kim’s reported total assets significantly undervalued his actual holdings, the lack of a legal requirement to declare cryptocurrency holdings meant that no laws had been violated.

Furthermore, the court found no clear evidence that Kim’s omission of his crypto holdings intentionally obstructed the Ethics Committee’s ability to review lawmakers’ assets. Despite his acquittal, Kim’s case has reignited a debate over lawmakers’ accountability and transparency in the cryptocurrency era.

Critics argued that holding significant cryptocurrency assets could present conflicts of interest, particularly since Kim had previously supported legislation delaying a proposed 20% tax on crypto gains.

Though Kim has denied any wrongdoing, the controversy has highlighted the need for clearer regulations governing public officials’ cryptocurrency holdings.

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