South Korea

South Korean lawmaker ousted over cryptocurrency scandal

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A proposal to expel South Korean lawmaker Kim Nam-kuk from the National Assembly was rejected on Wednesday due to problems with cryptocurrency transactions.

The differences were along party lines, with members of the ruling People’s Power Party and the main opposition Democratic Party unable to reach a consensus.

The parliamentary ethics subcommittee was divided 3-3 on the motion, missing the majority needed to qualify for expulsion, local media reported.

Kim, who resigned from the Democratic Party of Korea in May to become the Independent Party, has been at the center of a scandal involving his possession of about 800,000 WEMIX tokens, worth about 6 billion won ($4.5 million) in 2021.

The ownership has raised suspicions of potential insider trading, fueled by reports that Kim was actively trading cryptocurrencies during the legislative session.

The independent’s actions sparked an internal Democratic investigation in May that subsequently forced him to liquidate his tokens, Blockworks previously reported.

Days later, South Korean officials launched an investigation into local cryptocurrency exchanges, including raids on Upbit and Bithumb, where Kim allegedly maintained his digital wallet.

It is alleged that Kim may have withdrawn his holdings before the South Korean travel rule takes effect in March 2022, which requires tokenizing cryptocurrency transfers over 1 million won (about $757).

His scandal also led to the passage of the Kim Nam-guk Prevention Act, which requires lawmakers to disclose their digital assets holdings, in an effort to increase transparency of South Korean lawmakers’ holdings of digital assets.

There has been increased focus on a 2021 bill he co-sponsored to delay taxation on cryptocurrencies, reportedly introduced months before he sold the WEMIX token. King has publicly refuted the claims and has publicly stated his intention to sue media companies for false reporting.


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