• South Korea’s financial watchdog has reported to local prosecutors a series of crypto transactions by an opposition party lawmaker, Kim Nam-kuk.
• Kim allegedly withdrew 800,000 WEMIX tokens from late February to early March in 2022 and the transactions were classified as suspicious by the Financial Services Commission’s Financial Intelligence Unit (FIU).
• Kim had co-sponsored an amendment to the Income Tax Act in July 2021 which included a provision to defer taxation on virtual assets.
South Korean Lawmaker Investigated Over Crypto Transactions
The Financial Services Commission’s Financial Intelligence Unit (FIU) of South Korea is investigating Democratic Party lawmaker Kim Nam-kuk for suspicious cryptocurrency transfers. The FIU reported the transactions to local prosecutors after determining that they may be linked with a conflict of interest.
Kim Nam-Kuk’s Withdrawals
Kim reportedly withdrew 800,000 WEMIX tokens from late February to early March in 2022 while his WEMIX holdings stood at 6 billion won ($4.5 million) between January and February 2022. These withdrawals were reported as suspicious by the FIU and have prompted further investigation into the matter.
Travel Rule Implementation
South Korea implemented global standard-setter FATF’s travel rule on March 25, 2022, shortly after Kim reportedly made his withdrawals. This rule requires exchanges to collect personal data on transactions and report them when they exceed a certain threshold.
Tax Amendment Co-Sponsored By Kim
Kim had also co-sponsored an amendment to the Income Tax Act in July 2021 which included a provision to defer taxation on virtual assets until 2025. This has sparked outrage over potential conflicts of interest as it could benefit him directly from his own investments in cryptocurrency.
WEMIX Delisting
The issuing company for WEMIX was delisted from major exchanges in South Korea last year for allegedly reporting inaccurate circulation supply figures, though WeMade unsuccessfully challenged this decision in court.