DP courts even more controversy over lawmaker's crypto

Democratic Party Rep. Kim Nam-kuk. [YONHAP]

The Democratic Party (DP), already swamped with numerous controversies including its current leader’s legal battles and a bribery scandal involving its former leader, now faces a new problem: cryptocurrency investment.

One of the party’s key lawmakers, Kim Nam-kuk, an avid supporter of party leader Lee Jae-myung, has faced accusations since last week of having 6-billion-won ($4.5 million) in cryptocurrency investments.

Kim is a young politician who has asked party supporters for donations due to his supposedly dire financial situation.

He boasts how he eats instant noodles because he wasn’t heavily funded to buy nice meals and stays at motels instead of hotels, sharing rooms with his secretaries to save money.

Local media began reporting about Kim’s cryptocurrency investments last Friday.

He reportedly owned 800,000 Wemix, a cryptocurrency issued by game publisher Wemade that was once delisted.

The value of the crpytocurrency was estimated at 6 billion won.

According to the press reports, the government’s Financial Intelligence Unit (FIU) received a report of an unusual transaction from a cryptocurrnecy exchange last year.

Kim reportedly purchased unusually large amounts of Wemix between January and February 2022.

He is accused of selling the entire batch between February and March last year, just days before Korea’s adoption of the “travel rule,” which requires crypto companies to store and share information about the senders and recipients of cryptocurrency transactions exceeding 1 million won.

One of the issues raised was whether Kim used insider information since he sold the cryptocurrency just a month after purchasing it.

Furthermore, despite being required by law — as a member of parliament — to disclose all information about his personal holdings, Kim did not disclose his virtual assets.

While all public servants, including lawmakers, are supposed to disclose their personal wealth every year, including real estate and stock investments and bank deposits, there are no regulations that requires the disclosure of virtual assets.

Kim, who was elected to the National Assembly in April 2020, reported a total personal wealth of nearly 1.2 billion won in 2021. Last year, that figure was raised to 1.27 billion won and this year it went up to 1.53 billion won.

The lawmaker has denied any illegal acts, stressing that every transaction he has engaged in was transparent.

Firstly, he claimed that the cryptocurrency was purchased with the money he made from selling off LG Displays shares on Jan. 13. He said he made over 985.7 million won from the stock sales.

Kim also claimed that under the law, there are no regulations that require him to disclose information about virtual assets he owns.

Kim said he did not cash out, but re-invested in other crpytocurrencies, without saying what they are.

Posting on Facebook on Monday, Kim said that the seed money to his investments was largely the result of his frugal spending.

“I looked back at myself and asked whether my entire life of living frugal and conserving was hypocrisy,” Kim wrote. “But I can’t agree with claims that I have only pretended to live as a mid-low income person.”

He said he has tried to live a life of saving as much as possible and giving back to society, stressing that he has worn the same glasses for 20 years and inherited his father’s car, which now has mileage of over 240,000 kilometers.

The lawmaker instead accused Justice Minister Han Dong-hoon and the prosecutors of plotting against him.

The DP faces not only numerous indictments and investigations against its current chief, Lee Jae-myung, most notably related to a controversial development scheme, but also allegations of bribery against former party chief Song Young-gil in connection to the 2021 convention.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]