Holding 800,000 WEMIX proposals to “delay cryptocurrency taxation”!

Kim Nam-kuk, a lawmaker from South Korea’s main opposition Democratic Party (DP), has sparked controversy for previously not disclosing that he held and traded 6 billion won ($4.5 million) worth of cryptocurrencies in early 2022, but he has denied any misconduct.

It is reported that Kim Nam-kuk proposed a bill to postpone the taxation of cryptocurrencies in 2021, but at that time he actually held as many as 800,000 WEMIX tokens (issued by the online game company Wemade) in private. More than 6 billion won (about 4.5 million U.S. dollars).

Immediately after the news broke, the South Korean public accused Kim Nam-kuk of acting for his own benefit and proposing the bill purely for personal gain. At present, prosecutors have also launched an investigation into the matter to confirm whether there is any illegal act.

According to reports, Kim Nam-kuk transferred these Wemix tokens to his cryptocurrency account between January and February 2022, but then suddenly withdrew these assets from the end of February to the beginning of March of the same year.

Kim Nam-kuk declared his total assets to be 1.18 billion won in 2020, 1.26 billion won in 2021 and 1.53 billion won in 2022 under South Korea’s public official disclosure rules. Kim Nam-kuk claimed that he did not declare crypto assets because there is no such requirement in the disclosure rules.

However, members of the ruling National Power Party and critics have questioned where Kim Nam-kuk got the money to buy a large number of Wemix tokens. Although he claimed that all transactions were legitimate, he did not provide details about the source of funds for the purchase of these coins, or how he owned them.

In this regard, the 41-year-old Kim Nam-kuk, in an interview with Yonhap News Agency recently, sternly denied the accusation that he had cashed out 800,000 Wemix tokens between late February and early March last year.

Kim Nam-kuk said he simply transferred Wemix tokens to another cryptocurrency exchange, and that he did not open an account under a pseudonym before or after the Travel Rules transfer regulations were implemented in March last year.

He argued that even if he transferred the cryptocurrencies before the Travel Rules came into effect, the cryptocurrency exchanges had their own autonomous regulations at that time, and these exchanges also approved his financial source and transfer information.

Kim Nam-kuk said he has used the transferred Wemix tokens to buy various other cryptocurrencies.

Kim Nam-kuk’s interview comes as the Seoul Southern District Prosecutor’s Office is investigating whether his sale of Wemix, worth about 6 billion won last year, was illegal. South Korea’s Financial Intelligence Unit earlier reported Kim Nam-kuk’s cryptocurrency transfers to prosecutors as an unusual transaction.

Kim Nam-kuk is one of the legislative proposers of a 2021 bill in South Korea that seeks to delay taxation on cryptocurrencies. He denied that the cryptocurrency he owns has a conflict of interest with the above-mentioned bill, and said that the bill was introduced in response to public demand.

An editorial in South Korea’s “Herald” pointed out that this case highlights the urgency of requiring public officials to disclose the encrypted assets they hold.

The editorial said that there are more than 6 million cryptocurrency investors in South Korea, and the daily cryptocurrency transaction volume is estimated to be about 3 trillion won. Congress and the administration should investigate and close legal loopholes by mandating that public officials declare their cryptocurrency holdings on asset reports.