South Korea lawmaker Kim Nam-guk has been acquitted of charges related to concealing crypto holdings, as the court ruled that he was not legally required to disclose virtual assets under the country’s laws at the time.
Judge Jeong Woo-Yong of the 9th Criminal Division of the Seoul Southern District Court delivered the verdict on Feb. 10, clearing Kim of allegations that he obstructed public duty by deceit, as per a local media report.
The ruling found that virtual assets were not classified as registered assets under South Korea’s Public Service Ethics Act, meaning Kim had no obligation to declare them in his asset reports.
The verdict comes as South Korea is ramping up enforcement against crypto-related crimes with the Ministry of Justice moving to make its Joint Investigation Unit for Virtual Assets (JIU) a permanent entity, expanding its authority and resources.
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The former Democratic Party member was accused of moving crypto profits off the books, before South Korea enforced the Financial Action Task Force’s (FATF) Travel Rule, which mandates crypto disclosure.
Prosecutors alleged that he intentionally misrepresented his total wealth to the National Assembly’s Ethics Committee, raising concerns about potential conflicts of interest in financial legislation.
They sought a six-month prison sentence, arguing that Kim had reported his total assets a $834,000 (1.2 billion won) in 2021, despite holding nearly $6.8 million (9.9 billion won) in crypto.
Reeportedly, he had transferred funds between his bank and crypto accounts just before the December 31 declaration deadline to match prior-year reports, the prosecutors said.
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However, Judge Jeong dismissed the prosecution’s case, stating, “At the time, virtual assets were not registered assets according to the Public Service Ethics Act.”
The court added, “Even if the National Assembly’s Committee on Ethics for Public Officials could not accurately determine the actual total assets, it is not easy to see that its review authority was obstructed by deceit.”
Still, Judge Jeong didn’t fully absolve Kim, acknowledging that his asset reports contained "inadequate or inaccurate" information.
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The South Korean Financial Services Commission's inaugural law to protect crypto investors came into force on Thursday, as the country attempts to close its regulatory shortcomings related to the industry. The Virtual Asset User Protection Act aims to target unfair trading practices following incidents of bygone years including the likes of the Terra-Luna crash and FTX's collapse. The law's implementation follows recent initiatives by South Korean crypto exchanges to prevent mass delistings ahea...
While he has denied any wrongdoing, concern mount on whether his personal crypto investments conflicted with his legislative role, given his prior support for delaying a 20% tax on crypto gains.
Although Kim was acquitted in the first trial, prosecutors could appeal to a higher court, keeping the case—and the debate over lawmakers’ crypto disclosures—alive.
Crypto Tax Delay Adds to the Debate
South Korea’s crypto tax has been postponed once again, marking the third delay since it was first introduced in 2020.
Last December, the National Assembly approved an amendment to the Income Tax Act, pushing back the taxation of virtual asset gains until 2027.
South Korea’s Martial Law Derails Critical Crypto Reforms
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The plan was to impose a 20% tax on annual crypto income exceeding $1,724 (2.5 million won) starting in 2022, but repeated delays—driven by investor pushback and political divisions—have kept the policy from taking effect.
Efforts to strengthen crypto regulations have also slowed due to South Korea’s short-lived martial law declaration, which became priority over financial and legislative reforms.
Edited by Stacy Elliott.
