Major Exchanges in South Korea Raided by Authorities
- Prosecutors in South Korea have raided the offices of local crypto exchanges Upbit and Bithumb, seeking transaction records.
- It is believed that Kim Nam-kuk, a lawmaker involved in a crypto scandal, has wallets on these crypto exchanges.
- Kim announced his resignation from the Democratic Party, stating that he did not want to tarnish the name of his party.
- The South Korean Financial Intelligence Unit is investigating Kim for trading roughly 6 billion won ($4.5 million) in crypto assets.
The authorities in South Korea continue to crack down on local exchanges and try to prevent crypto crimes in the region, which increased after the 2021 crypto market bull run. As per a recent turn of events, authorities have raided two major crypto exchanges in the country, Upbit and Bithumb, following the recent scandal involving the digital assets of lawmaker Kim Nam-kuk. The prosecutors raided the offices of the exchanges in an attempt to gather evidence of illicit activities.
As per a report from a local media outlet in South Korea, Yonhap, a team of prosecutors from the Seoul Southern District Prosecutors Office which runs under the Ministry of Justice, raided the crypto exchanges Bithumb and Upbit, seeking records of transactions and other similar materials. It is important to note that Kim has his wallets on these crypto exchanges, and the prosecutors aim to track down his funds.
This news follows the resignation of Kim from his political party on May 14 after he was accused of selling over $4 million in cryptocurrencies that he gained through illicit means prior to the enforcement of the “Travel Rule” by the Financial Action Task Force. Kim was responsible for regulation of digital assets in South Korea and was reportedly delaying a bill that was supposed to impose a 20% tax on cryptocurrencies from 2023 to 2025.
As per a report from the Korea Times, the South Korea Financial Intelligence Unit is investigating Kim for trading roughly 6 billion won ($4.5 million) in crypto assets before South Korea introduced the Travel Rule in March 2022. On the other hand, the lawmaker said that he did not cash out the crypto but simply transferred it to another exchange, and therefore, he did not need to report such activity.
“This is a serious moral hazard,” said Hong Joon-pyo, mayor of the city of Daegu. “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.”
The lawmaker has announced that he will leave the Democratic Party, as he does not want his alleged involvement in the crypto controversy to harm the name of the party. On the other hand, Kim plans to prove his innocence to the prosecutors in South Korea independently, as per a Facebook post.
“I decided that it was no longer right to put a burden on the party and its members. I don’t think any damage should be done to the party at such a critical time,” Kim said, while adding that he would “stand up to unfair political offenses and reveal the truth.” He also criticized the local media, stating that their reports were not based on facts and that he would confront them in the near future.
The region has become the new target of the world’s largest crypto exchange, Binance, which recently announced that it will re-enter South Korea with the acquisition of Gopax, a local crypto exchange that is part of the Digital Asset eXchange Alliance (DAXA).
On the other hand, authorities have also issued an arrest warrant for Do Kwon, the person responsible for the collapse of the Terra ecosystem. Prosecutors believe Terra executives manipulated the market to enrich themselves and recently raided the houses of the employees of Kwon’s company and seized around 210 billion won, or $160 million.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
