A South Korean lawmaker has been jailed for six months for hiding digital assets worth $7.5 million. Kim Nam-kook lied about his assets when he served in the National Assembly. The former Democratic Party member was said to have hidden funds he got from trading crypto.
During the proceeding at the Seoul Southern District Court, prosecutors alleged that Nam-kook deliberately transferred tokens to and from his bank deposits to misrepresent his finances. The presiding Judge Jeong Woo-yong ruled in favor of the prosecutor, saying the lawmaker intentionally obstructed official duties.
South Korean lawmaker’s crypto deception
Nam-kook started his deception in 2021, during his property declaration. During the exercise, he said his total assets were 1.2 billion won, approximately $900,000 at the time. What he failed to disclose was about 9.9 billion won (approximately $7.5 million) in cryptocurrencies in his account. The next year, he hid crypto deposits worth 990 million won ($750,000).
According to the prosecution, the act carried out by the defendants were tricks not to declare his crypto holdings in 2021 and 2022. “The defendant intended not to declare the coins he owned,” the prosecution said. The prosecution further explained that his actions obstructed the ethics committee from carrying out their official obligations accurately. With the movements of assets between his bank and wallet, Nam-kook made it impossible to track his actual finances.
Crypto usage explodes in South Korea
The South Korean crypto industry is very active, with the assets rivaling stocks in popularity. The love for crypto dates as far back as 2013, when Bithumb and Korbit set up their operations in the country. Four years later, over 10% of the country’s population had invested in Bitcoin and other assets. The Kimchi Premium also went up, with prices of crypto assets rising 20% higher.
The adoption created risks, forcing the government to ban Initial Coin Offerings (ICO) in 2017. Regulators fingered concerns as a result of scams and speculation in the crypto industry. The 2018 crash also called for harder regulations, with regulators mandating users to verify their identities using their bank accounts.
In 2021, South Korea increased its crypto rules, mandating Virtual Assets providers to register their businesses with the Financial Intelligence Unit. The regulator also activated Anti-money laundering (AML) laws. Despite the regulations, adoption in South Korea is still high. According to trading data, daily crypto trading volume is around $18 billion, a 22% increase compared to stock markets.
Meanwhile, the government has continued to discuss taxing, with plans on a 20% tax announced for January 2025. However, the plan has been moved to 2027. The delay will also great ample time for the government to look for ways to balance growth with regulation.
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