Korean Congressman Sentenced to 6 Months in Prison for Concealing $6.8M in Crypto

Kim Nam-guk, a former South Korean Democratic Party lawmaker, has been charged with concealing millions in cryptocurrency and underreporting his assets during the financial disclosure processes in 2021 and 2022. Prosecutors are seeking a six-month prison sentence for his alleged actions.

Nam-guk Conceals Crypto Profits

According to the indictment, Nam-guk failed to report cryptocurrency holdings worth $6.8 million (9.9 billion won) in 2021, officially declaring only $835,000 (1.2 billion won) in assets. He is accused of repeating the offense in 2022 by hiding an additional $689,000 (990 million won) in crypto profits. 

Prosecutors claim that Nam-guk converted undeclared crypto gains into other digital assets and moved funds into bank accounts to disguise his true wealth. They added that these actions were meant to bypass scrutiny from the National Assembly Ethics Committee, which is responsible for reviewing the financial disclosures of public officials.

Crypto Regulation Challenges

Nam-guk’s case highlights South Korea’s ongoing struggle with cryptocurrency regulation. Although the nation enforces strict oversight of digital assets, it has repeatedly delayed the introduction of a crypto tax. Initially set for January 2025, the tax—which would impose a 20% levy on annual gains exceeding $1,875 (2.5 million won)—was recently pushed to January 2027 due to political disagreements and legislative delays.

The postponement follows a politically turbulent period in South Korea, which saw an attempted coup, a sudden policy reversal by the opposition, and the president’s impeachment—all within two weeks. The ruling party supported the delay, but the Democratic Party criticized it, accusing the government of using the postponement for political leverage.

Cross-Border Crypto Transactions

In addition to its ongoing cryptocurrency regulation efforts, South Korea is set to tighten controls on cross-border crypto transactions to combat tax evasion and foreign exchange crimes. Finance Minister Choi Sang-Mok announced plans to introduce a reporting requirement for businesses involved in international crypto transfers.

Sang-Mok explained that cross-border crypto transactions have been exploited as a loophole for hiding illicit funds. The Korea Customs Service revealed that digital assets account for 81% of foreign exchange crimes since 2020, totaling $1.2 billion. The proposed regulations would require businesses to register with authorities and submit monthly reports to the Bank of Korea. However, the measures depend on establishing a supporting legal framework.