Bitcoin Enters Party Politics in South Korea

Bitcoin Enters Party Politics in South Korea

Time Stamp: May 8, 2023 7:29 AM
Bitcoin Enters Party Politics in South Korea PlatoBlockchain Data Intelligence. Vertical Search. Ai.

A relatively young South Korean lawmaker, Kim Nam-kuk, of the Democratic Party invested 6 billion won ($4.5 million) in Wemix, a crypto token by the South Korean game developer Wemade.

That act alone is now a mini-scandal in South Korea where the spokesperson for the current ruling People Power Party, Yoo Sang-bum, said:

“The public is shocked by his ambivalent attitude and attempts to gain sympathy by highlighting his cheap shoes, even though he held crypto assets worth 6 billion won.”

Korean media claims Nam-kuk has campaigned on being frugal, and they also point out he declared a networth of 1.2 billion won when his crypto holdings are 5x that amount. Nam-kuk says there’s no requirement to declare the crypto holdings.

In addition the ruling party claims he sold the coins in March last year, shortly before the introduction of the real-name cryptocurrency transaction system called the Travel Rule.

Nam-kuk states he did not sell them, but transferred them to another exchange. That unnamed exchange reported him for reasons unknown to the Korea Financial Intelligence Unit which in turn passed it on to the prosecution.

There’s no public evidence or even allegations of any illegal activity however. More just politics in that Nam-kuk apparently claims he doesn’t even use hotels to save money and yet the ruling party says he invests in crypto.

His other crime is that he proposed a bill in 2021 along with a group of other lawmakers from the Democratic Party to delay the taxation of crypto gains.

The People Power Party (PPP) however does not seem to be anti bitcoin. In fact the current South Korean president from PPP, Yoon Suk-Yeol, promised during the election campaign to even allow ICOs.

But the overall regulatory regime in South Korea is restrictive by global standards as exchanges need to partner with a local bank and investors likewise need linked local bank accounts, which has created the Kimchi Premium.

The country took to crypto in 2017 following the ban of crypto exchanges in China, and has been significant to this market since then.

Making this party political spat a curious development as in some ways crypto appears to be more a background matter to the usual football politics, and in other ways it might highlight the consequences of this restrictive regulatory framework as the ruling party is now accusing a lawmaker from the opposition based on what is usually private information that they got from the crypto exchange.

That raises privacy concerns due to this one sided window on sensitive matters which can be abused as Nam-kuk says he just merely invested.

“I did not borrow and receive money from anyone at all (for the crypto trading),” Nam-kuk said. “I sold some of my stocks to use for the initial crypto investment. I also made transactions only through real-name accounts and I can transparently share all of the transaction records.”

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