A member of South Korea’s national legislature could face prison time for allegedly falsely declaring his cryptocurrency holdings.
State prosecutors recommended sentencing the legislator to, among other things, six months in prison for failing to disclose a significant portion of its crypto assets and failing to comply with South Korea’s policy on transparency and accountability of government officials.
Prison sentence
A state prison may hold Kim Nam-kook, a member of South Korea’s National Assembly, for failing to disclose all of his cryptocurrency holdings, in violation of the country’s code of ethics for public officials.
State prosecutors accused Kim of intentional actions failure to report your cryptocurrency holdingsalleging that he had deliberately concealed his possession of a significant amount of digital assets.
During the proceedings, the prosecution team asked Judge Jeong Woo-yong of the 9th Criminal Division of the Southern District Court in Seoul to sentence the former Democratic Party lawmaker to six months in prison.
Source: Bloomberg images
According to South Korean prosecutors, Kim incorrectly declared his crypto assetssuggesting that the legislator should be charged with obstructing the performance of official duties.
Prosecutors argued that “the defendant had no intention of reporting the coins in his possession.”
“He falsely obstructed the Ethics Committee of the National Assembly from inspecting the assets of a member of the National Assembly,” the prosecution team added.
A South Korean congressman was sentenced by prosecutors to six months in prison for hiding his cryptocurrency holdings. He concealed cryptocurrency assets worth 9.9 billion won ($6.8 million) and 990 million won ($680,000) in 2021 and 2022, thereby violating the obligation…
— Wu Blockchain (@WuBlockchain) December 18, 2024
Crypto assets worth over $6 million
Kim, in his official declaration to the National Assembly in 2021, stated that he had assets worth only $834,356.
An investigation found that the lawmaker hid his cryptocurrency assets twice.
In 2021, Kim failed to report that he had $6.8 million in crypto assets. The legislator also did not declare that in 2022 its digital assets would be worth $680,000.
As of today, the market cap of cryptocurrencies stood at $3.47 trillion. Chart: TradingView
“He hid cryptocurrency assets worth 9.9 billion won ($6.8 million) and 990 million won ($680,000) in 2021 and 2022, violating public officials’ obligation to declare property holdings,” Wu Blockchain said in the post.
Prosecutors said the legislator transferred funds to the bank account to hide the source of his profits by misrepresenting his real assets. They also learned that only the conversion of the remaining cryptocurrency into assets is declared as its total value.
No tax policy regarding cryptocurrencies
Some analysts blame the South Korean government for its inability to implement a much-needed cryptocurrency taxation law.
The up-to-date tax law covering cryptocurrencies was supposed to come into force next year, but the government decided to postpone the tax policy until 2027.
Under the long-awaited Cryptocurrency Tax Act, the government will impose a 20% tax on cryptocurrency profits.
Analysts say the confusion around cryptocurrency regulations could boost political tensions in the country.
Opposition lawmakers from the Democratic Party perceive that the delay in implementing the cryptocurrency tax is being used by the government as a political tool.
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