A member of South Korea’s national legislature could potentially face prison time for allegedly misreporting his cryptocurrency holdings.
State prosecutors recommended that the lawmaker be sentenced to six months in prison for failing to disclose a significant portion of his crypto assets and for failing to adhere to South Korea’s policy on transparency and responsibility of civil servants.
Prison sentence
A state penitentiary could be awaiting Kim Nam-kook, a member of the South Korean National Assembly, for non-disclosure of all his cryptocurrency holdings, thereby violating the country’s code of ethics for public officials.
State prosecutors accused Kim of deliberately failing to report his cryptocurrency holdings, alleging he intentionally concealed possession of a significant amount of digital assets.
During court proceedings, prosecutors asked Judge Jeong Woo-yong of the 9th Criminal Division of the Seoul Southern District Court to sentence the former Democratic Party lawmaker to six months in prison.
Source: Bloomberg images
According to South Korean prosecutors, Kim mistakenly declared his crypto assets, suggesting the lawmaker should be charged with obstructing official duties.
Prosecutors claimed that “the defendant intended not to declare the documents he possessed.”
“He falsely obstructed the examination by the Ethics Commission of the National Assembly of the MP’s assets,” added the prosecution.
A South Korean congressman has been sentenced to six months in prison by prosecutors for hiding his cryptocurrency assets. He concealed cryptocurrency assets equivalent to 9.9 billion won ($6.8 million) and 990 million won ($680,000) in 2021 and 2022, violating the obligation to…
– Wu Blockchain (@WuBlockchain) December 18, 2024
Over $6 Million in Crypto Assets
Kim claimed he only had $834,356 in assets in an official statement to the National Assembly in 2021.
The investigation revealed that the lawmaker had twice concealed his cryptocurrency assets.
As of 2021, Kim has not disclosed that he owns $6.8 million in crypto assets. The lawmaker also failed to declare his digital assets worth $680,000 in 2022.
As of today, the market cap of cryptocurrencies stood at $3.47 trillion. Chart: TradingView
“He concealed cryptocurrency assets equivalent to 9.9 billion won ($6.8 million) and 990 million won ($680,000) in 2021 and 2022, violating the obligation of public officials to declare their real estate,” Wu Blockchain said in a post.
State prosecutors said the lawmaker transferred funds to a bank account so he could conceal the source of his profits, misreporting his true assets. They also discovered that only the conversion of the remaining cryptocurrencies into assets is reported as the total value.
Lack of crypto tax policy
Some analysts blame the South Korean government’s failure to implement a much-needed tax law on cryptocurrencies.
The new tax law covering crypto assets was supposed to be implemented next year, but the government decided to delay the tax policy until 2027.
Under the long-awaited cryptocurrency tax law, the government will impose a 20% tax on cryptocurrency gains.
Analysts said ambiguity surrounding cryptocurrency regulation could increase political tension in the country.
Opposition lawmakers from the Democratic Party believe that the delay in implementing the crypto tax is being used by the government as a political tool.
Featured image of DALL-E, chart by TradingView
