South Korean crypto scandal prompts Upbit and Bithumb raids

In South Korea, 60 crypto exchanges could be out of business as early as Friday, with just one meeting government requirements so far.
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A recent controversy involving a South Korean lawmaker’s cryptocurrency holdings has resulted in his resignation from his political party, and subsequent raids on prominent cryptocurrency exchanges Upbit and Bithumb, local media reports.

Kim Nam-kuk stepped down from the Minjoo party on Sunday after it was revealed that he possessed approximately $4.5 million worth of wemix coins in 2021. Interestingly, news outlets had already reported on Kim’s holdings two years ago. The question remains whether Kim had access to insider information that bolstered his investments or if he received free coins due to his political position.

Wemix, the company behind the cryptocurrency in question, vehemently denied any illegal support or provision of internal investment information to National Assembly members. In a blog post, Wemix stated, “Reports to the effect that WeMade illegally supported Wemix or provided internal information related to investments to members of the National Assembly are completely untrue.”

Upbit and Bithumb raided in Kim Nam-kuk investigation

As part of the investigation into Kim, Korean prosecutors raided Upbit and Bithumb, the two cryptocurrency exchanges that he allegedly used to open digital wallets. The raids on Monday reportedly resulted in the seizure of transaction records.

The scandal has prompted an internal investigation by the ruling political party into Kim’s conduct, as he faces allegations of conducting cryptocurrency trades during parliamentary sessions. Notably, Kim had voted in favor of regulatory legislation that sought to recognize certain gaming funds as cryptocurrencies.

Read more: Terraform Labs co-founder Daniel Shin and nine others indicted in South Korea

Kim’s crypto scandal unfolds against the backdrop of South Korea’s efforts to establish comprehensive regulations for cryptocurrencies. In January, members of the National Assembly reviewed 17 proposals related to crypto, covering a wide range of topics such as investor protections and reserve requirements for South Korean crypto markets.

Kim’s current holdings remain undisclosed.

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