Kim Namguk was acquitted on charges of hiding crypto holdings. A court ruled he had not been legally required by the laws in South Korea at the time to declare virtual assets.
According to a report in local media, Judge Jeong WooYong from the 9th Criminal Division at the Seoul Southern District Court gave the verdict on February 10, clearing Kim of accusations that he obstructed his public duties by lying.
Kim did not have to include virtual assets as assets registered under the Public Service Ethics Act in South Korea.
South Korea’s Ministry of Justice has expanded its Joint Investigation Unit for Virtual Assets to a permanent unit, thereby increasing its authority and resource.
Before South Korea’s Financial Action Task Force (FATF Travel Rule) which requires crypto disclosure, the former Democratic Party Member was accused of moving cryptocurrency profits off the books.
According to the prosecution, he deliberately misrepresented his wealth total before the Ethics Committee of National Assembly. This raised concerns over potential conflict-of-interest in financial laws.
The prosecution sought to sentence Kim Kim for six months in prison, saying that he had declared his assets at $834,000 in 2021 (1.2 billion won), despite having nearly $6,8 million (9.9 trillion won) worth of crypto.
The prosecutors claimed that the man had transferred the funds from his bank account to his crypto-accounts just before December 31 in order to make sure the reports matched those of previous years.
The judge dismissed the case of prosecution, saying: “At the time, virtual assets were not registered assets according to the Public Service Ethics Act.”
The court also 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.”
Even though Judge Jeong acknowledged that Kim’s asset reports were inaccurate, he did not fully exonerate him. "inadequate or inaccurate" information.
Despite his denials, concerns are growing about whether his crypto investments were in conflict with his role as a legislator, especially given that he previously supported delaying the 20% tax on cryptocurrency 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 has postponed its crypto tax a third time, since the first delay in 2020.
The National Assembly passed an amendment to Income Tax Act in December last year, which delays the taxation on virtual assets gains until 2027.
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.
The efforts to improve crypto regulation have also been slowed down due to the short-lived declaration of martial law in South Korea, which took precedence over legislative and financial reforms.
Stacy Elliott is the editor.
