South Korean lawmaker acquitted in crypto asset concealment case

South Korean lawmaker Kim Nam-kuk has been acquitted of charges related to concealing cryptocurrency holdings, a court ruled, stating that he was not required to disclose virtual assets under the country’s laws at the time.

On Feb. 10, the South Korean newspaper Chosun Daily reported that Judge Jeong Woo-Yong, from the 9th Criminal Division of the Southern Seoul District Court, found Kim not guilty of charges alleging he obstructed public duty by deceit.

Kim was accused of liquidating crypto assets and not reporting roughly $4.5 million in profit before lawmakers in the country enforced the Financial Action Task Force’s (FATF) “Travel Rule,” which requires disclosure of crypto assets. 

The controversy led to Kim’s departure from the Democratic Party, saying that he wanted to relieve party members of the burden brought about by the lawsuit. 

Related: South Korean authorities raid Upbit, Bithumb crypto exchanges after political scandal

South Korean lawmaker acquitted of charges

Prosecutors had claimed that Kim deliberately concealed his crypto holdings to interfere with the National Assembly’s Ethics Committee’s review of lawmakers’ financial disclosures.

On Dec. 18, 2024, prosecutors requested a six-month prison sentence for Kim, alleging that he reported his total assets as 1.2 billion won ($834,000) in 2021, despite holding nearly 9.9 billion won ($6.8 million) in cryptocurrency.

As holding the assets could present a potential conflict of interest, prosecutors said Kim obstructed the Ethics Committee’s review of National Assembly members’ assets. 

However, Judge Jeong ruled that, at the time, virtual assets were not subject to mandatory disclosure under South Korea’s Public Service Ethics Act. The court determined it was difficult to conclude that the lawmaker was obligated to disclose his assets. 

The court added that even though the Ethics Committee could not determine Kim’s total assets, it was not clear that its review authority was obstructed by deceit. “This is considered a case without criminal evidence,” the court concluded. 

While the lawmaker has been acquitted in a court of first instance, prosecutors could still appeal the case in a higher court.

As a member of the National Assembly, Kim had some authority in handling digital asset laws. The lawmaker reportedly backed legislation proposing a 20% tax on crypto gains to be deferred. Critics have questioned whether his personal crypto holdings created a conflict of interest, though he has denied any wrongdoing.