Kim Nam-kuk cashes out while legislating on crypto

Kim Nam-kuk, a member of South Korea’s National Assembly, reportedly liquidated more than $4 million worth of cryptocurrencies before the country’s legislators enforced the “Travel Rule” of the Financial Action Task Force.

The Korea Times reported on May 8 that the Korea Financial Intelligence Unit is investigating Kim for trading approximately $4.5 million worth of crypto assets before South Korea implemented the Travel Rule in March 2022.

According to reports, the lawmaker claimed he did not liquidate the assets but rather transferred them to another exchange and that he was not required to disclose such activity.

As a member of South Korea’s National Assembly, Kim had some authority over laws about digital assets, and he reportedly supported a bill that would defer a 20% tax on crypto gains from 2023 to 2025.

According to reports, Kim has denied the existence of any potential conflicts of interest between managing crypto assets in his portfolio and ruling on them as a lawmaker.

Hong Joon-Pyo, the mayor of the city of Daegu, described this as a grave moral hazard. “He should have left his position as a lawmaker to pursue speculative trading.”

In addition, he was a leader in delaying crypto taxation, which can be viewed as an abuse of his legislative power to secure his private assets.”

The report was released at a time when legislators in the United States are contemplating prohibiting members of Congress from investing in stocks and possibly digital assets.

At the time of publication, the majority of U.S. representatives and senators were required to report such investments, but they were not required to abstain from voting or otherwise recuse themselves if potential conflicts of interest arose in legislation or regulations.

Because Do Kwon, co-founder and former CEO of Terraform Labs, is a citizen of South Korea, many postmortem reports on the 2022 crypto market collapse have included South Korea.

According to reports, South Korean authorities have been pursuing Kwon’s extradition since his arrest in Montenegro in March, as many of his alleged crimes affected South Korean citizens.