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South Korean prosecutors have allegedly conducted searches at the offices of the two prominent cryptocurrency exchanges in the nation – Upbit and Bithumb – as part of an ongoing inquiry into Kim Nam-kuk.
The politician has come under public scrutiny following multiple reports suggesting he obtained 800,000 Wemix tokens by circumventing required regulations. He moved the tokens from Bithumb to Upbit last year, and authorities have indicated that the exchanges might have had some involvement.
The Investigation Expands
A local news source reported that Korean authorities searched the headquarters of Upbit and Bithumb in Seoul in an effort to clarify the situation surrounding Kim Nam-kuk.
The Democratic Party (DP) has recently called on him to divest his 800,000 Wemix tokens amid allegations that he may have utilized insider information to acquire them a few years prior.
The politician reportedly withdrew the assets at the start of 2022, several months before the implementation of legislation mandating crypto entities to disclose personal information for transfers exceeding $758. He was also part of the group that suggested postponing income taxation on digital assets in South Korea.
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Nam-kuk stated he would comply with the DP’s request and sell the assets, which are currently valued at around $660,000.
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“I received the recommendation from the party to sell my crypto assets. I will faithfully implement the recommendation. I will transparently disclose data to the investigation team and undergo the inquiry faithfully.”
Wu Blockchain noted that Nam-kuk transferred 800,000 Wemix tokens from Bithumb to Upbit in 2022, which may have triggered the investigation into the exchanges. Upbit considered this to be “an improper transaction” and reported it to the authorities at that time.
The Second Investigation of Bithumb This Year
Korean prosecutors raided Bithumb’s offices in January amid allegations that the company or an employee manipulated the price of an undisclosed coin listed on its platform.
“This is a search and seizure to secure the transaction details of a specific coin, and it has nothing to do with Bithumb,” the authorities stated.
This inspection followed shortly after prosecutors sought an arrest warrant for Kang Jong-Hyun (the owner of the exchange) on charges of embezzlement and market manipulation. His sister also encountered legal issues after the Seoul Southern District Prosecutor’s Office accused her of artificially inflating the share prices of certain companies through the issuance of convertible bonds.
Despite being one of the largest cryptocurrency exchanges in South Korea, Bithumb has faced various controversies over the years. Park Mo – the largest shareholder of Bithumb Holdings Co. (the entity behind the platform) – was discovered deceased in December 2022 outside his residence in southern Seoul.
While the preliminary investigation found no evidence of foul play and suggested that the death might have been a suicide, the crypto community expressed skepticism. Notably, Mo was closely associated with Jong-Hyun and his sister and reportedly discussed the potential acquisition of his organization by the now-defunct FTX.
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