Former South Korean Democratic Party lawmaker Kim Nam-guk is facing legal scrutiny for allegedly hiding a significant amount of cryptocurrency in his asset declarations for 2021 and 2022. He is accused of omitting millions in crypto profits and transferring assets to bank accounts in order to conceal them. According to local news outlet Donga, prosecutors are seeking a six-month prison sentence for Kim, claiming that he failed to declare 9.9 billion won (approximately $6.8 million) in crypto assets. The accusations include deliberately leaving out important financial details, such as crypto profits of 1.2 billion won in 2021 and 990 million won in 2022, valued at $835,000 and $689,000 respectively. To cover up these discrepancies, Kim is alleged to have transferred some of his crypto holdings into regular bank accounts, making it appear as though he had converted his digital assets into fiat currency. This case has brought attention to the ongoing debate surrounding South Korea’s crypto regulations, particularly as the country moves towards implementing a long-debated crypto tax. Originally scheduled for 2022, the tax is now set to take effect in January 2025 due to political disagreements. Under the new policy, the tax exemption threshold for crypto gains will increase significantly, reducing the number of affected investors. Kim’s case is significant due to his vocal criticism of his party’s stance on crypto taxation, adding further complexity to the issue. This case is just one of several high-profile crypto-related legal actions taking place in South Korea, including the recent sentencing of a former bank employee who embezzled millions for failed crypto investments. Kim’s trial is expected to set an important precedent for future legal actions and crypto taxation policies in the country. Meanwhile, the country’s financial watchdog, the Financial Supervisory Service (FSS), has taken a restrictive stance towards crypto-related investments, even blocking ETFs focused on companies like Coinbase. This is part of the wider regulatory environment in the country, which continues to struggle amidst rising political unrest. It is worth noting that South Korea is home to one of the largest crypto markets in the world, and trading has become immensely popular in the country in recent years. In fact, on December 3, the country’s crypto market saw a historic surge in trading volumes, reaching $34.6 billion amid the announcement of martial law. XRP was the standout asset, driving $28 billion in trades on Upbit. Bitcoin faced a brief 30% drop during a “flash crash” but quickly recovered. This record trading volume coincided with the government’s declaration of martial law.
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