SNEAK PEEK
- Exchanges Bithumb and Upbit were raided owing to an investigation regarding lawmaker Kim Nam-kuk’s crypto holdings.
- Kim is accused of campaign finance violations, secrecy of criminal proceeds and tax portals.
- The total amount of cryptocurrencies acquired and liquidated by Kim are under dispute.
On May 15, South Korea’s two local and biggest crypto exchanges were raided as part of an investigation regarding the increasing suspicions about digital assets of independent lawmaker Kim Nam-kuk.
Transaction records and other materials from Bithumb and Upbit were seized by a team of investigators from the Seoul Southern District Prosecutors Office. Kim runs his digital wallets at Bithumb and Upbit and has been charged for selling his digital assets without making appropriate disclosures to the authorities.
Prosecutors in South Korea raid cryptocurrency exchanges Upbit and Bithumb after connections surfaced to a local politician Kim Nam-kuk, who faces allegations of suspicious crypto activity.
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The reason behind the move is Kim coming under fire, as he owned over 800,000 Wemix coins worth approximately 6 billion won in 2021. Wemix Coin is the native token of blockchain game firm Wemade. Reportedly, the amount is at odds with his thrifty image. Suspicions have led to questions about the source of the money and whether he used insider information.
The investigation began amid Kim leading a bill with the aim of slowing down taxation on crypto income alongside owning crypto worth the reported amount. However, he argued that his crypto transactions were done in line with local regulations.
The Financial Intelligence Unit of South Korea discovered suspicious activity in Kim’s crypto transactions and alerted local prosecutors at the end of 2022.
The claimed unlawfulness of Kim’s involvement is not clear as of now.
The first-term lawmaker, who exited from the key opposition Democratic Party on May 14, has also been accused of trading crypto coins at the time when he attended at least two meetings of the judiciary committee of the National Assembly. The meetings took place last year in May and November.
Meanwhile, Bithumb has faced increased inspections from local regulators in South Korea. The cryptocurrency exchange is being examined owing to issues related to insufficient internal controls, security breaches, and violations of financial regulations.
In February, Bithumb’s anonymous chairman and owner, Kang Jong-Hyun was arrested on charges of theft and stock manipulation. Other than him, Kang Ji-Yeon, CEO of publicly traded Bithumb affiliates, and Kang’s younger sister were also accused of the same.
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- Source: https://investorbites.com/south-korean-prosecutors-raid-crypto-exchanges-upbit-and-bithumb/
