South Korean Lawmaker Faces Prison for Concealing $6.8M in Crypto Profits

Key Takeaways

• South Korea prosecutes lawmaker for hiding $6.8 million in crypto profits between 2021-2022.
• Prosecutors seek a six-month prison sentence for the former Democratic Party legislator.
• Political turmoil in South Korea has delayed the implementation of a crypto tax until 2027.

Kim Nam-guk, a former Democratic Party lawmaker, could face six months in prison for allegedly concealing millions in cryptocurrency holdings and underreporting his assets during the 2021 and 2022 financial disclosure processes.

Concealing Millions in Profits

Prosecutors allege that Kim deliberately omitted key details about his cryptocurrency assets, which totaled 9.9 billion won (approximately $6.8 million) in 2021.

While officially reporting assets worth 1.2 billion won ($835,000), the South Korean politician failed to declare significant crypto profits. In 2022, he was accused of repeating the violation, hiding an additional 990 million won ($689,000).

The indictment also claims Kim converted undeclared crypto earnings into other digital tokens and moved funds into bank accounts to obscure the full extent of his wealth.

Prosecutors argue that these actions were intended to evade scrutiny from the National Assembly Ethics Committee, which reviews asset declarations by public officials.

Delays in Crypto Tax Amid South Korea’s Political Turmoil

Kim’s case underscores South Korea’s fraught relationship with crypto regulation.

The country, known for its strict oversight of digital assets, has yet to implement a long-debated crypto tax due to political infighting and shifting legislative priorities.

Initially scheduled for January 2025, the crypto tax—which would impose a 20% levy on capital gains exceeding 2.5 million won ($1,875)—was postponed.

Ongoing political instability and uncertainty about comprehensive crypto policies have pushed its implementation further to January 2027.

The crypto tax delay follows a tumultuous period in South Korean politics, including an attempted coup , an overnight reversal by the opposition, and the president’s impeachment—all within two weeks.

The Democratic Party, which had previously resisted the crypto tax delay, accused the ruling party of using the postponement as a political tactic.