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South Korean lawmaker Kim Nam-kuk was acquitted by the Southern Seoul District Court of charges alleging he concealed cryptocurrency holdings and obstructed public duty. Judge Jeong Woo-Yong of the 9th Criminal Division ruled that Kim was not obligated to disclose his virtual assets under the country’s laws at the time.
Prosecutors had previously accused Kim of liquidating cryptocurrency and failing to report approximately $4.5 million in profits prior to the enforcement of the Financial Action (WA:ACT) Task Force’s (FATF) "Travel Rule," which mandates the disclosure of crypto assets. They sought a six-month prison sentence, claiming Kim reported his total assets as 1.2 billion won ($834,000) in 2021, despite allegedly holding nearly 9.9 billion won ($6.8 million) in cryptocurrency.
The controversy surrounding these allegations led to Kim’s resignation from the Democratic Party. He stated his departure was to alleviate the pressure his party colleagues faced due to the lawsuit.
Judge Jeong determined that the Public Service Ethics Act did not require the mandatory disclosure of virtual assets at the time of the alleged offense. The court found it difficult to conclude that Kim had a legal duty to disclose his cryptocurrency holdings.
Additionally, the court noted that while the Ethics Committee could not ascertain Kim’s total assets, there was no clear evidence that its review authority was impeded by deceit, leading to the conclusion that there was no criminal evidence in the case.
Kim, as a National Assembly member with some influence over digital asset laws, had supported legislation proposing to defer a 20% tax on crypto gains. This proposal raised questions about a potential conflict of interest due to his personal crypto holdings, which he has consistently denied.
While Kim has been cleared in the court of first instance, the possibility remains for prosecutors to appeal the decision in a higher court.
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