Crypto Exchanges Upbit & Bithumb Under Fire! South Korean Authority Investigates Following Ex-Lawmaker’s Crypto Scandal

In a significant development that is set to shake up the current crypto market sentiment, South Korean authorities have initiated an intense investigation into the country’s two largest cryptocurrency exchanges, Upbit and Bithumb. This action follows the recent revelation of a high-profile scandal involving a former lawmaker and his questionable cryptocurrency transfers.

Upbit And Bithumb Face Legal Scrutiny

South Korean legal authorities have conducted a thorough search of accounts at the country’s leading cryptocurrency exchanges, Upbit and Bithumb. This action pertains to transfers carried out by ex-lawmaker Kim Nam-kuk on Monday. In addition, Kakao’s messaging application also fell under scrutiny as Kim reportedly used its Klip cryptocurrency wallet for transactions, as reported by CoinDesk Korea.

Since the previous week, Rep. Kim Nam-kuk, associated with the Democratic Party of Korea, has found himself tangled in allegations of conflict of interest. These accusations stem from cryptocurrency withdrawals he made in 2022, raising questions about the appropriateness of his actions.

Kim is also under scrutiny for allegations that he engaged in cryptocurrency trading during the National Assembly’s judiciary committee meetings in May and November of the previous year, according to a report by CoinDesk Korea. Despite portraying himself as a modest politician, it was discovered that he owned 800,000 WEMIX tokens, valued at 6 billion won ($4.5 million), during the months of January and February 2022.

Ruling People Power Party Launches Internal Task Force

Kim Nam-kuk stepped down from the Minjoo party on Sunday, following revelations that surfaced over a week ago about his ownership of approximately $4.5 million in wemix coins during 2021. This information aligns with previous reports made by several news sources two years ago.

At this point, it remains unclear whether Kim had any unfair advantage such as access to privileged information that might have assisted his investment decisions, or whether he was gifted free coins by virtue of his political stature.

Wemix said in a blog post: “Reports to the effect that WeMade illegally supported Wemix or provided internal information related to investments to members of the National Assembly are completely untrue.”

Korean prosecutors launched a search operation on Monday at Upbit and Bithumb, the platforms where Kim is purported to have his digital wallets, as part of their ongoing investigation into Kim’s affairs.

The report suggests that transaction records were confiscated during these searches.

This controversy has also triggered an in-house investigation by the ruling political party into Kim, following accusations of him engaging in cryptocurrency trades during parliamentary sessions.

Throughout his political career, Kim supported regulatory legislation that would classify certain gaming revenues as cryptocurrencies.

The unfolding of Kim’s crypto scandal coincides with South Korea’s ongoing efforts to regulate the cryptocurrency industry.