On Monday, a local news outlet reported that South Korea’s Upbit and Bithumb crypto exchanges are under investigation by the Seoul Southern District Prosecutors Office over suspicions concerning lawmaker Kim Nam-kuk’s digital assets.
Officials said they are currently investigating whether Kim used insider information to acquire his massive digital assets worth around $4.5 million and to find out their origin. As part of the probe, prosecutors raided Upbit and Bithumb earlier today and seized transaction records and other materials.
Opposition Lawmaker’s Scandal
The investigation has caused a stir, with many questioning the source of Kim’s digital assets. And how he managed to accumulate such a significant amount of money. Accusers have alleged that Kim, a first-term lawmaker, owns around 800,000 Wemix coins.
The report deemed this amount inconsistent with his frugal image. Additionally, Kim faces accusations of trading cryptocurrency assets while attending at least two meetings of the judiciary committee of the National Assembly in May and November of last year.
Notably, Upbit and Bithumb are two major South Korea’s largest crypto exchanges. But this is not the first time they have come under scrutiny.
In 2018, Upbit was investigated over allegations of fraud after it was accused of inflating its balance sheets. However, the exchange was later cleared of any wrongdoing.
Bithumb, on the other hand, was hacked twice in 2018. The hack resulted in the loss of millions of dollars worth of crypto.
South Korea Stance On Crypto
South Korea has since been a major player in the world of crypto. However, the country has been taking a more cautious approach toward the regulation of digital assets in recent years.
In February, South Korea’s Financial Services Commission (FSC) announced new rules for cryptocurrencies. The rules required all virtual asset service providers to register with the agency and comply with strict anti-money laundering regulations. The move was seen as a step toward greater regulatory clarity and oversight in the crypto industry.
Despite the tighter regulations, South Korea remains a hub for cryptocurrency activity, with some of the world’s largest crypto exchanges, such as Bithumb and Upbit, based in the country. However, the government has also been cracking down on illegal crypto-related activities, including fraud and money laundering.
It is worth noting the recent investigation into Upbit and Bithumb is likely to have an impact on the country’s cryptocurrency industry. This is because the two exchanges account for a significant portion of the country’s trading volume.
The outcome of the investigation could also serve as a warning to other exchanges to be vigilant and comply with regulations to prevent fraudulent activities.
In addition to regulatory efforts, South Korea is also exploring the potential of blockchain technology to improve various sectors, such as finance, healthcare, and logistics. The country has launched several blockchain initiatives and projects, including a government-backed pilot program to track beef exports using blockchain technology.
While South Korea remains a key player in the global crypto landscape, it is also taking a measured and cautious approach to regulating the industry to ensure investor protection and prevent illicit activities.
Regardless of the increased regulations in the crypto industry, the global crypto market has maintained composure. Over the past 24 hours, the global crypto market capitalization has surged nearly 2% with a value looking to reclaim the previously recorded $1.2 trillion.
Featured image from, Chart from TradingView.com