Kim Byung-kee, the leader of the Democratic Party of Korea's legislative group, is accused of trying to secure a job for his son at Bithumb and pressuring rival Upbit, raising concerns about a conflict of interest.
A senior South Korean lawmaker is facing serious ethical scrutiny after being accused of abusing his position to interfere in the cryptocurrency market. Kim Byung-kee, the leader of the Democratic Party's legislative group and a member of the Political Affairs Committee, which oversees financial institutions, is accused of attempting to secure a job for his son at the Bithumb exchange and targeting competitor Upbit with allegations of monopolistic practices.
According to a report by Kyunghyang Shinmun News released last Sunday, Kim Jong-un allegedly instructed his team of aides to “attack Dunamu,” the company that operates the Upbit exchange, as tech giant Naver prepares to finalize its $10 billion acquisition of Dunamu in November.
This coincided with Kim's son securing a position at Bithumb, Upbit 's direct competitor in the South Korean cryptocurrency market. The incident sparked deep concerns about conflicts of interest, particularly given Kim's position of authority overseeing domestic financial institutions.
In response to the allegations, Mr. Kim firmly denied any wrongdoing. The lawmaker asserted that Bithumb's recruitment activities, including hiring his son, were entirely independent and unrelated to him. Kim Byung-kee also expressed regret that his legislative activities were being linked to his son's employment, despite the recruitment process being conducted transparently.
Bithumb also defended the company, emphasizing that its recruitment process is transparent, open, and fair. A representative from the exchange also stated that addressing the issue of monopolies in the cryptocurrency market is a pressing concern for policymakers and has been raised since 2021.
South Korea's legal framework for cryptocurrencies remains slow to progress.
The incident occurred against the backdrop of South Korea's struggles to establish a comprehensive legal framework for the cryptocurrency industry. Unlike the US, which passed a bill regulating stablecoin payments in July of this year, South Korean regulators and the central bank have stalled discussions since November regarding the Vai of banks in issuing stablecoins Peg to the won.
The ruling party is now expected to unveil a new draft law in January 2025, after failing to meet a key deadline in its regulatory roadmap. This delay reflects the challenges South Korea faces in balancing the promotion of technological innovation with protecting investors in a rapidly developing cryptocurrency market.
