In a recent revelation, Kim Nam-kuk, a South Korean politician has decided to leave his political party following the allegations regarding cryptocurrencies filed against him. The lawmaker announced his exit from the Democratic Party and said that he would continue his fight to prove his innocence independently.
According to media reports, Kim has said that his departure will reduce the burden on the party members brought about by the controversy. He believes the issues should no longer affect the party during a crucial time.
However, while leaving the party, the lawmaker highlighted that he would continue to support the political faction irrespective of his membership. Kim also said he would continue his efforts to bring the truth to light as an independent legislator. He said:
I will stand up to the end of unfair political offenses and reveal the truth.
Furthermore, the lawmaker called out the media entities for reporting on his crypto dealings, labeling it to be a false accusation. He stated the reports were not based on facts and pledged to confront them.
On May 8, South Korea’s financial regulator, Financial Services Commission (FSC), reported a list of crypto transactions executed by Kim to local prosecutors which sparked domestic outrage over a potential conflict of interest. The lawmaker has been accused of liquidating over $4 million worth of crypto assets before the country started to enforce the “Travel Rule” from the Financial Action Task Force in March 2023.
Notably, Kim had been an important part of Korean politics and also co-sponsored an amendment to the Income Tax Act in July 2021, which included a provision to defer taxation on virtual assets. South Korea postponed plans to tax income from crypto as well as income from the “transfer or lending” of virtual assets to 2025.
While the initial plan was to impose a 20% tax on crypto investment gains above about $2,100 per year, recently, Yoon Suk-yeol, South Korean president, suggested otherwise. He announced that he would try to delay taxation concerning crypto investment gains until the Digital Asset Basic Act (DABA) comes into force.
Nonetheless, as the crypto market continues to grow, South Korea’s central bank has been constantly ramping up its efforts to oversee crypto in the country. On April 24, the Bank of Korea was allowed to investigate crypto-related businesses. With this, the bank can request transaction data from local crypto operators.
Similarly, the South Korean authorities are speedily progressing toward crypto regulation. Additionally, the collapses that occurred in the crypto sector last year, including the collapse of Terra and the FTX exchange, highlighted the need for urgency in regulation. In March, the South Korean parliament commenced its discussion for robust and wide-ranging crypto regulation prioritizing investor protection and the issuance and disclosure of assets.