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South Korean Politician Under Fire For Suspicious Crypto Trading

2 mins
Updated by Ryan James
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In Brief

  • South Korean politician Kim Nam-kuk is under investigation for suspicious crypto trading.
  • The politician is accused of cashing out $4.5 million before the government imposed a crypto travel rule in March 2022.
  • He opposed the tax on crypto capital gains in 2021.
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Kim Nam-kuk, the South Korean politician from the Democratic Party of Korea (DPK), faces an investigation for shady crypto trading.

While South Korea is exploring crypto regulations, one of the politicians of the opposition party is under investigation for suspicious trading.

Misuse of Power to Trade $4.5 Million Worth of Crypto?

According to The Korea Times, Kim faced allegations of cashing out his crypto holdings before the government imposed a crypto travel rule in March 2022.

The travel rule made it mandatory for Virtual Asset Service Providers (VASPs) to report some details of crypto transactions. 

According to 21Analytics, the travel rule required VASPs to submit the following details:

  • Originator’s name
  • Beneficiary’s name
  • Originator’s wallet address
  • Beneficiary’s wallet address

However, crypto exchanges reported to the Korean Financial Intelligence Unit that Kim cashed out 6 billion Korean won (approx. $4.5 million) in crypto just before the enforcement of the rule. Kim’s transactions are now under investigation.

Meanwhile, the DPK politician denies the accusations and claims that he transferred the crypto to other exchanges.

Kim Delayed the South Korea Crypto Gains Tax

Besides the crypto trading controversy, Kim and some other DPK politicians opposed the tax on crypto capital gains in 2021. Due to the opposition, the government delayed the imposition of taxes to 2023 and later to 2025.

Hong Jun-pyo, the Mayor of Daegu, says:

This is a serious moral hazard. He appeared to have had a get-rich-quick scheme with crypto trading. He should have left his job as a lawmaker and focused on speculative trading instead. On top of that, he stood at the forefront of delaying crypto taxation, which can be seen as an abuse of his legislative power for the protection of his private assets.

Due to various immoral practices, a South Korean law firm has asked the government to tighten crypto rules. BeInCrypto reported last month that the South Korean crypto regulation bill had passed the first stage of review.

This year, the bill that might become law focuses on consumer protection, and there is a heavy penalty for non-compliance.

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In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

Harsh Notariya
Harsh started investing in crypto during the 2021 bull market. He took the opportunity of the market crash in May to learn more about Bitcoin and blockchain technology. Since...