Prosecutors Secure Kim Nam-guk's Cryptocurrency Transaction Records... Cryptocurrency Exchange Raided (Comprehensive)

Bithumb, Upbit, Kakao Blockchain Affiliates, etc.

On the 15th, the prosecution launched a full-scale investigation by raiding cryptocurrency exchanges in connection with the controversy over independent lawmaker Kim Nam-guk's (41) cryptocurrency holdings.

According to the cryptocurrency industry, the Criminal Division 6 of the Seoul Southern District Prosecutors' Office (Chief Prosecutor Lee Jun-dong) sent prosecutors and investigators to the cryptocurrency exchanges Bithumb and Upbit, as well as Kakao's blockchain affiliate, to secure Kim lawmaker's cryptocurrency transaction records.

The prosecution had previously requested search warrants twice for Kim's electronic wallet from late October to early November last year, applying charges of violations of the Political Funds Act, the Act on the Regulation of Concealment of Criminal Proceeds, and tax evasion, but the warrants were dismissed.

[Image source=Yonhap News]

As the controversy surrounding Kim's coin holdings and transactions grew recently, the prosecution strengthened its rationale for the necessity of a compulsory investigation and obtained a search warrant on the third request for the same charges as the previous two times.

Bithumb, Upbit, and Kakao Clip are the exchanges where Kim's cryptocurrency electronic wallets are registered. Kim transferred about 855,000 WEMIX coins from Bithumb to an Upbit electronic wallet in January to February last year. The Financial Intelligence Unit (FIU) regarded this large cryptocurrency transfer as a suspicious transaction and handed over related data to the prosecution.

The prosecution saw the need to verify the source of the WEMIX coins held in Kim's Upbit electronic wallet. However, the court dismissed the search warrant last year on the grounds that merely holding a large amount of coins does not easily raise suspicion of criminal charges.

Within the cryptocurrency industry, there are suspicions that Kim held about 1.27 million WEMIX coins, more than initially known. In addition to the approximately 855,000 coins transferred from Bithumb to Upbit, about 417,000 coins were transferred from Bithumb to the Clip wallet. At the time, this amounted to up to 10 billion KRW in value.

Kim explained that he invested in various cryptocurrencies with about 900 million KRW from selling LG Display stocks, but did not clarify the exact timing of buying and selling the WEMIX coins.

The controversy surrounding WEMIX expanded from the source of investment funds to whether the coins were "free coins." It was partially revealed during the Democratic Party's fact-finding investigation that Kim received WEMIX coins via "airdrop" (a method of distributing coins free of charge to investors under certain conditions as part of events or marketing). However, the specific circumstances and scale of the airdrop were not confirmed.

Kim not only held WEMIX but also P2E (Play to Earn) related coins such as Mavrex and Gemhub, and participated in proposing amendments to the Game Industry Act and bills to postpone coin taxation, sparking controversy.

Many of the domestic P2E-related coins actively traded by Kim were deposited in KLAYswap, a decentralized finance (DeFi) service based on the Klaytn blockchain mainnet developed by Kakao affiliate Ground X, and used to receive cryptocurrency KLAYswap (KSP) as rewards.

With traces of buying and selling not only WEMIX worth about 6 billion KRW but also various "junk coins," along with specific allegations such as insider information use and legislative lobbying, the prosecution's investigation is understood to have resumed in earnest. The prosecution plans to first analyze the sources of the coins in Kim's electronic wallet and his transaction history to determine whether any illegal activities occurred.

This content was produced with the assistance of AI translation services.