A South Korean court has dismissed charges against lawmaker Kim Nam-kuk, ruling that he was not obligated to disclose his cryptocurrency holdings under existing laws at the time of the allegations. This decision came from Judge Jeong Woo-Yong of the Southern Seoul District Court’s 9th Criminal Division. The case revolved around accusations that Kim had concealed approximately $4.5 million in profits derived from liquidating crypto assets, actions which were allegedly taken prior to the enforcement of the Financial Action Task Force’s “Travel Rule.”

Prominent in the case was Kim’s departure from the Democratic Party, which he claimed was necessary to alleviate the burden on party members stemming from the ongoing legal proceedings. The allegations suggested that he had obstructed the National Assembly’s Ethics Committee by failing to accurately report his financial disclosures. In 2021, Kim reportedly declared total assets of 1.2 billion won ($834,000), while the concealed cryptocurrency holdings were worth nearly 9.9 billion won ($6.8 million). Prosecutors argued that this discrepancy indicated a possible conflict of interest and hindered the Ethics Committee’s review process.

Judge Jeong concluded that virtual assets were not included in the mandatory disclosure obligations under the Public Service Ethics Act at the time of Kim’s actions. The court’s ruling emphasized that there was insufficient evidence to support claims of deceitful conduct, noting the lack of clarity regarding any obstruction of the review process.

Despite the favorable ruling for Kim in this initial phase, prosecutors maintain the option to appeal the case to a higher court. As a National Assembly member, Kim has had an influential role in shaping digital asset regulations and had previously supported legislation to postpone the implementation of a 20% tax on cryptocurrency gains, raising questions about potential conflicts of interest linked to his personal investments.