South Korean officials have raided the offices of Upbit and Bithumb cryptocurrency exchanges as part of a probe into the crypto holdings of independent lawmaker Kim Nam-kuk.
On Monday, a team of prosecutors from the Seoul Southern District Prosecutors Office raided the two crypto platforms in order to gain transaction records and other materials related to Kim, according to a report from the South Korean news agency Yonhap.
The raids come over a week after it was revealed that Kim owned around $4.5 million in wemix coins in 2021. The regulator managed his virtual wallets using Upbit and Bithumb.
The news raised speculations about whether Kim had access to insider information that bolstered his investments or if he received free coins due to his political position as he previously worked on digital asset legislation.
Kim Nam-kuk stepped down from the Minjoo party over the weekend after the revelation.
The scandal has also led to an internal investigation from the ruling political party into Kim.
Along with the ambiguity surrounding his cryptocurrency investments, the first-term lawmaker is accused of participating in cryptocurrency trade during his presence at two sessions of the National Assembly’s judiciary board held in May and November of the previous year.
Wemix Refutes Claims that it Provided Internal Documents to Lawmakers
In a recent blog post, Wemix refuted allegations that it provided the members of the National Assembly with insider information or any form of guidance related to their investments.
“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.”
WEMIX is a blockchain-based “Global Gaming Platform” developed by Wemade Tree, which is a subsidiary company of WEMADE as its flagship blockchain gaming services arm.
WEMADE is a gaming company serving the Gaming market for more than 20 years and is publicly traded at Kosdaq (Korea Stock Exchange).
The company holds more than 40 renowned game IPs including ChuanQi, the legendary AAA game in China, reaching over 500 million users.
At the time of writing, Wemix is trading at $0.864484, up by 6% over the past day. However, the token is down by more than 96% compared to its all-time high of $24.71 recorded in November 2021.
South Korean Financial Authorities in Disagreement Over Who Supervises Crypto
South Korea is gearing up to create regulatory guidelines for digital assets, including cryptocurrency trading, as a means to oversee the nascent industry.
However, behind the scenes, there has been some disagreement between the financial authorities over who supervises the crypto market.
The Financial Services Commission (FSC), which is responsible for supervising the local cryptocurrency market and industry, is at odds with the central bank, which is pushing to demand access to data from crypto platforms.
This dispute came to light on April 25 during a meeting between bank and FSC representatives and lawmakers at the National Assembly to discuss the cryptocurrency regulation bill, according to the official transcript of the meeting.
FSC vice chairman Kim So-young stated that the central bank’s right to data should not include cryptocurrencies, as the tokens are currently not widely used for payments.
However, Bank of Korea Deputy Governor Lee Jong-ryeol disagreed, citing the significant impact of the cryptocurrency market on the financial system and the necessity of requiring crypto operators to identify their impact on monetary and credit policy, financial stability, and payment and settlement systems.
Eventually, the FSC agreed to the central bank’s demand for access to cryptocurrency company data to be included in upcoming legislation, in a bid to speed up the process of establishing a legal framework for cryptocurrencies.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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