South Korean Lawmaker in Crypto Scandal Survives Expulsion Vote

South Korean Lawmaker in Crypto Scandal Survives Expulsion Vote

Rep. Kim
Nam-kuk, the independent South Korean lawmaker facing scrutiny over his crypto
holdings, has retained his seat in the country’s National Assembly. A
parliamentary ethics subcommittee’s bipartisan vote to expel the first-time legislator ended in a
3-3 decision, Yonhap News
Agency
reported earlier today (Wednesday).

No Boot
for Embattled South Korean Lawmaker

The ruling
People’s Power Party (PPP) and the opposition Democratic Party (DP) hold an equal number of seats on the subcommittee, the outlet
said. The group needed a majority support to
dismiss the lawmaker, who is a former member of the opposition party.

Finance Magnates reported in May that South Korean prosecutors made an effort to probe
Kim
after
receiving information from the South Korean Financial Services Commission’s
Financial Intelligence Unit (FIU) about suspicious crypto transactions
reportedly made by the lawmaker. Kim reportedly had about 800,000 WEMIX coins in
his crypto wallet between January and February 2022. The coins were said to be worth six billion won (or $4.5 million) at the time.

The legislator was accused of withdrawing all the coins before South Korea implemented the Financial
Action Task Force’s (FATF) travel rule on March 25 last year. FATF is
a global money laundering and terrorist financing watchdog.

To implement the travel
rule, South Korea mandated domestic crypto exchanges to reveal the
identities of entities and transactions exceeding one million won. However, Kim
previously clarified that he neither withdrew his digital assets nor violated any law.

As part of
an investigation into the allegations, prosecutors recently raided three local
crypto exchanges
, including Upbit. In addition, PPP recently
sent a team to WeMade, the company behind the WEMIX
token, with the hope of shedding light on the case.

In the wake of the scandal, Kim in May gave up his membership of the DP and
became an independent legislator. Last week, Kim announced that he will not
seek re-election in the upcoming general elections, according to Yonhap News
Agency
. The declaration is widely interpreted as an attempt by the lawmaker to get a
milder penalty from the parliamentary ethics committee.

With the
vote conducted on Wednesday ending in a stalemate, the parliamentary ethics
committee can either start a new session to re-raise the expulsion motion, or
it can conduct a new vote within the subcommittee to impose
a less harsh
disciplinary action against Kim, the local media further reported.

Lawmakers to Declare Digital Asset Holdings

Meanwhile,
while South Korea’s Public Service Ethics Act require top government officials
to disclose their traditional assets to the public, the law does not include
cryptocurrencies within its ambit. To change this, the parliament has
introduced a new bill that will require legislators to declare their digital asset holdings.

In May, the
People’s Power Party sought to move up the
enforcement date
for the regulation. The bill was expected to come into force in December, Finance
Magnates
reported. However, Yun Jae-ok, the Floor Leader of the ruling party, said the date “is too
distant”.

SEC charges Citigroup; FMA and FCA warn against clone websites; read today’s news nuggets.

Rep. Kim
Nam-kuk, the independent South Korean lawmaker facing scrutiny over his crypto
holdings, has retained his seat in the country’s National Assembly. A
parliamentary ethics subcommittee’s bipartisan vote to expel the first-time legislator ended in a
3-3 decision, Yonhap News
Agency
reported earlier today (Wednesday).

No Boot
for Embattled South Korean Lawmaker

The ruling
People’s Power Party (PPP) and the opposition Democratic Party (DP) hold an equal number of seats on the subcommittee, the outlet
said. The group needed a majority support to
dismiss the lawmaker, who is a former member of the opposition party.

Finance Magnates reported in May that South Korean prosecutors made an effort to probe
Kim
after
receiving information from the South Korean Financial Services Commission’s
Financial Intelligence Unit (FIU) about suspicious crypto transactions
reportedly made by the lawmaker. Kim reportedly had about 800,000 WEMIX coins in
his crypto wallet between January and February 2022. The coins were said to be worth six billion won (or $4.5 million) at the time.

The legislator was accused of withdrawing all the coins before South Korea implemented the Financial
Action Task Force’s (FATF) travel rule on March 25 last year. FATF is
a global money laundering and terrorist financing watchdog.

To implement the travel
rule, South Korea mandated domestic crypto exchanges to reveal the
identities of entities and transactions exceeding one million won. However, Kim
previously clarified that he neither withdrew his digital assets nor violated any law.

As part of
an investigation into the allegations, prosecutors recently raided three local
crypto exchanges
, including Upbit. In addition, PPP recently
sent a team to WeMade, the company behind the WEMIX
token, with the hope of shedding light on the case.

In the wake of the scandal, Kim in May gave up his membership of the DP and
became an independent legislator. Last week, Kim announced that he will not
seek re-election in the upcoming general elections, according to Yonhap News
Agency
. The declaration is widely interpreted as an attempt by the lawmaker to get a
milder penalty from the parliamentary ethics committee.

With the
vote conducted on Wednesday ending in a stalemate, the parliamentary ethics
committee can either start a new session to re-raise the expulsion motion, or
it can conduct a new vote within the subcommittee to impose
a less harsh
disciplinary action against Kim, the local media further reported.

Lawmakers to Declare Digital Asset Holdings

Meanwhile,
while South Korea’s Public Service Ethics Act require top government officials
to disclose their traditional assets to the public, the law does not include
cryptocurrencies within its ambit. To change this, the parliament has
introduced a new bill that will require legislators to declare their digital asset holdings.

In May, the
People’s Power Party sought to move up the
enforcement date
for the regulation. The bill was expected to come into force in December, Finance
Magnates
reported. However, Yun Jae-ok, the Floor Leader of the ruling party, said the date “is too
distant”.

SEC charges Citigroup; FMA and FCA warn against clone websites; read today’s news nuggets.

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