South Korea Crypto Scandal Deepens as Lawmaker Faces Allegations of Nepotism and Exchange Interference

A growing political scandal in South Korea is drawing intense scrutiny over alleged corruption, nepotism, and possible manipulation of the country’s cryptocurrency industry. Kim, a former National Intelligence Service (NIS) official with 25 years of service who later transitioned into politics, is now facing at least nine separate corruption allegations. Several of the claims center on accusations that he exploited his government influence to secure advantages for his family, particularly in relation to major crypto exchanges.

According to local media reports, Kim began taking a sudden interest in South Korea’s leading crypto companies—Dunamu, the operator of Upbit, and rival exchange Bithumb—after joining the National Assembly’s Political Affairs Committee following the April 2024 general election. Investigators were told by a former aide that Kim met repeatedly with Dunamu’s CEO between September and November 2024, often bringing his younger son to private dinners and distributing his résumé directly to executives. Kim also met with Bithumb’s leadership in November 2024, and his son ultimately joined Bithumb in January 2025.

After his son’s hiring, Kim allegedly pushed for aggressive scrutiny of Upbit, accusing Dunamu of monopolistic practices and instructing staff to prepare questions aimed at weakening the company. In February 2025, Kim publicly questioned the Financial Services Commission chairman about Dunamu’s market dominance, prompting discussions with the Fair Trade Commission. Investigators believe these actions were motivated by favoritism toward Bithumb, where his son was employed.

The crypto-related allegations are part of a broader pattern. Kim is also accused of intervening in 2016 to secure his elder son a position at the NIS through a specially created recruitment process. Additional claims include pressuring a university president over admissions, accepting luxury hotel vouchers while overseeing an airline merger review, and misuse of public expense cards by his wife.

The controversy comes at a critical time for South Korea’s crypto market. Upbit currently holds around 63% of trading volume, while Bithumb has surged to roughly 30%, fueled by massive increases in marketing spending. With Binance preparing to finalize its Gopax acquisition, regulatory influence has never been more consequential. Kim has denied all wrongdoing, and the investigation remains ongoing.