South Korean Lawmaker Faces Prison Time for Allegedly Misreporting Cryptocurrency Holdings

State prosecutors recommended that the legislator be sentenced to a six-month jail time for not disclosing a significant portion of his crypto assets

A South Korean legislator could face imprisonment for allegedly misdeclaring his cryptocurrency holdings.

State prosecutors on Monday recommended a six-month jail sentence for the lawmaker over nondisclosure of a significant portion of his crypto assets, in violation of the country’s policy on transparency and accountability of public servants.

Kim Nam-kook, a member of the South Korean National Assembly, might be headed to state penitentiary for failing to disclose all his cryptocurrency holdings, in breach of the country’s code of ethics for public officials.

State prosecutors are accusing Kim of deliberately failing to report his cryptocurrency holdings, alleging that he intentionally concealed owning a substantial amount of digital assets.

During the legal proceeding, the prosecution team asked Judge Jeong Woo-yong of the 9th Criminal Division of the Seoul Southern District Court to sentence the former Democratic Party legislator to six months of imprisonment.

Prosecutors claimed that Kim misreported his crypto assets, suggesting that the lawmaker should be charged with obstruction of official duties.

“The defendant intended not to declare the coins he owned,” the public prosecutors said.

“He obstructed the National Assembly Ethics Committee’s review of the National Assembly member’s assets in a false manner,” the prosecution team added.

A South Korean congressman was sentenced to six months in prison by prosecutors for concealing his cryptocurrency holdings. He concealed cryptocurrency assets equivalent to 9.9 billion won (6.8M USD) and 990 million won (680K USD) in 2021 and 2022, violating the obligation of…

— Wu Blockchain (@WuBlockchain) December 18, 2024

According to the South Korean prosecutors, the nondisclosure of crypto assets by the lawmaker was intended to conceal the source of his profits.

Investigations revealed that the lawmaker concealed on two separate occasions his cryptocurrency assets.

In 2021, Kim failed to report that he owned $6.8 million worth of crypto assets. The lawmaker also failed to declare his digital assets worth $680,000 in 2022.

“He concealed cryptocurrency assets equivalent to 9.9 billion won (6.8M USD) and 990 million won (680K USD) in 2021 and 2022, violating the obligation of public officials to declare property holdings,” Wu Blockchain said in a post.

State prosecutors said that the legislator moved funds to a bank account so he could conceal the source of his profits, misreporting his true assets. They also found out that only the conversion of the remaining crypto to assets is being declared as his total worth.

The incident comes amid rising political tensions in South Korea over the government’s failure to implement a new tax law on cryptocurrency.

The new tax law covering crypto assets was supposed to be implemented next year but the government decided to delay the tax policy until 2027.

Under the long-awaited crypto tax law, the government will impose a 20% tax on cryptocurrency gains.

However, ambiguity surrounding the regulations for cryptocurrencies might be increasing the political tension in the country.

Opposition lawmakers from the Democratic party perceive that the delay in the crypto tax implementation is being used by the government as a political tool.