Rep. Kim Nam-kuk of the Democratic Party of Korea has allegedly withdrawn a massive 800,000 WEMIX tokens in the period between late February to early March 2022, just before the introduction of the global standard-setter FATF’s travel rule on March 25, 2022.
In the latest development, South Korean authorities have reported local authorities regarding a series of crypto transfers by opposition party lawmakers, sparking domestic outrage and a potential conflict of interest.
As per the details, Rep. Kim Nam-kuk of the Democratic Party of Korea has allegedly withdrawn a massive 800,000 WEMIX tokens in the period between late February to early March 2022. In the period between January and February 2022, Kim’s WEMIX holdings stood at 6 billion won ($4.5 million). All these crypto transfers have now been reported to the Financial Services Commission’s Financial Intelligence Unit (FIU).
Thus, the FIU has classified all these withdrawals as suspicious transactions while reporting them further to the prosecutor’s office. South Korea has been one of the most active market when it comes to crypto trading. Thus, it has kept South Korean lawmakers vigilant and working on crypto regulations for a while.
Earlier this year, the South Korean law firm Yulchon was working with the government to help them “tighten oversight of the country’s exuberant crypto sector”. As said, South Korean citizens have heavy exposure to crypto assets. As per statistics, a staggering 13% of the global Bitcoin trading volume comes from the Korean Won. However, the sad part is that the South Korean market has witnessed a large number of crypto scams taking place over the past few years.
South Korea’s Do Kwon, the founder of the Terra LUNA project, was among the ones to trigger the crypto winter of 2022.
South Korea’s FATF Rules
Soon after Kim made withdrawals for the WEMIX tokens, South Korea implemented the global standard-setter FATF’s travel rule on March 25, 2022. This rule requires exchanges to collect personal information on transactions and report them further to authorities whenever they exceed a certain threshold.
However, Kim states that he hasn’t cashed out his tokens and didn’t violate any laws, as per the report from CoinDesk Korea. Also, as per South Korea’s Public Service Ethics Act, there’s no reporting required for virtual assets.
Over the last year, some of the major South Korean exchanges have delisted WEMIX for allegedly reporting inaccurate circulation supply figures. Interestingly, WEMIX’s issuing company WeMade made an unsuccessful attempt in challenging the delisting in court.
The South Korean crypto community still awaits clarity on the taxation of crypto income as lawmakers postpone it to 2025.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.