Ruling Party's Kim Nam-guk Faces Presidential Election Fund and Money Laundering Allegations... Bank Account Search Unavoidable

Controversy over Rep. Kim Nam-guk's cryptocurrency holdings is spreading to suspicions of money laundering and use of funds for the presidential election. As the prosecution plans to expand the scope of investigation into Rep. Kim, it is expected that they will conduct a search and seizure of his bank accounts to verify the allegations.

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An official from the Seoul Southern District Prosecutors' Office said, "We are gradually expanding the necessary investigations related to Rep. Kim." The official added, "To verify the allegations raised by the media and others, it is necessary to analyze (Rep. Kim's cryptocurrency) transaction history," and said, "If the suspicions are cleared, there will be no need to continue with further search and seizure."

Rep. Ha Tae-kyung of the People Power Party said, "Rep. Kim exchanged 3.6 billion KRW worth of WEMIX for KLAYtn Pay, which is nothing but 'trash,'" and added, "According to a tip-off, when WEMIX is exchanged for KLAYtn Pay through an exchange, the 'operation forces' return cash after deducting a certain commission (20%)." Rep. Ha further claimed, "Rep. Kim moved cryptocurrency to his personal wallet before the 'Travel Rule,' which requires cryptocurrency exchanges to provide sender and receiver information for transactions over 1 million KRW, was implemented on March 25 last year, which was intended to evade fund tracking."

Rep. Ha's claim is that Rep. Kim engaged in so-called 'coin-kang,' cashing out part of his cryptocurrency investment, but this cannot be confirmed solely by the transaction records of Rep. Kim's coin wallet, so there are calls for tracking bank accounts and verifying whether there are any nominee accounts.

The prosecution began investigating after receiving cryptocurrency transaction data related to Rep. Kim from the Financial Intelligence Unit (FIU) in early last year. Rep. Kim transferred approximately 850,000 WEMIX from a Bithumb wallet to an Upbit wallet in January and February last year. It is presumed that the FIU detected the possibility of money laundering in connection with this. The prosecution requested a search warrant for the cryptocurrency wallets held by Rep. Kim in late October to early November last year, but the court dismissed the warrant on the grounds that merely holding a large amount of cryptocurrency does not constitute probable cause for a crime.

The money laundering suspicions ignited by the ruling party have expanded to allegations that Rep. Kim intended to use cryptocurrency investment funds for presidential election funds. Rep. Kim explained that he only withdrew 4.4 million KRW in cash during the last presidential election period, but there is evidence that about 200 million KRW was actually cashed out. Rep. Yoon Jae-ok of the People Power Party said, "Rep. Kim did not report the 250 million KRW withdrawn in cash during his asset declaration. Where did this money go?" and added, "It is also suspicious that Rep. Kim exchanged 510,000 WEMIX coins for 590,000 KLAYtn Pay coins just before the presidential election." The truth of Rep. Yoon's claims can also only be confirmed through account tracking.

If the prosecution's investigation confirms that the 'money laundering claim for securing presidential election funds' is groundless, it will be a political setback for the ruling party. According to Rep. Kim's annual public official asset disclosures, his assets have not increased sharply. This suggests that even if Rep. Kim made profits from cryptocurrency, he may have simply reinvested in cryptocurrency without going through banks or securities firms. Also, the claim that Rep. Kim transferred some cryptocurrency to bank accounts for use as presidential election funds is somewhat unconvincing. Under current law, election funds must have their sources reported, so if Rep. Kim's coin profits flowed through bank accounts into the Democratic Party's presidential election fund management account at the time, it would be verifiable.

On the other hand, if it is confirmed that Rep. Kim laundered coin investment funds for presidential election funds, the opposition party will suffer a fatal blow.

Attorney Yejaseon of the law firm Gwangya said, "Everyone invests in cryptocurrency ultimately to realize profits through cashing out," and added, "To uncover the truth, it is necessary to examine not only the cryptocurrency wallets but also Rep. Kim's bank accounts and the cash flow of those around him."

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