You might want to be seated for this!
In a high-profile and eye-opening case, Kim Nam-guk, a former lawmaker from South Korea’s Democratic Party, is accused of hiding his cryptocurrency assets. Prosecutors have requested a six-month prison sentence for Kim, claiming he intentionally failed to report a large sum of crypto in his asset declarations to the National Assembly, which is a legal requirement.
The case is heating a crypto tax debate and how to tackle such cases in the current scenario where crypto assets are seen as a safety net by many small-scale traders and investors.
Prosecutors say Kim tried to hide his crypto holdings from the National Assembly’s Ethics Committee, which reviews lawmakers’ financial details. To conceal his assets, he transferred a large portion of his crypto into a regular bank account, making it look like he wasn’t holding any digital coins. He also misreported his total assets, declaring much lower amounts than he actually owned.
By converting some of his crypto into bank deposits, he falsely included them in his asset reports while keeping the actual value of his cryptocurrency hidden.
Catching the Discrepancies
Kim’s asset declarations in 2021 and 2022 were much lower than what he truly owned. In 2021, he reported assets worth about 1.2 billion won, but prosecutors believe he actually had 9.9 billion won in cryptocurrency at the time.
Despite the serious tax charges against him, Kim publicly criticized his party’s push for virtual asset taxation last month. He called the move an ineffective attempt to gain public support. The Democratic Party is currently working on changes to the tax law that would raise the tax deduction limit for virtual assets to 50 million won, a promise made during the last election.
As South Korea faces growing concerns over digital asset management, it’s clear that the country needs stronger rules to prevent tax evasion and better control over the expanding crypto market.
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