A Coin That Once Surged Nearly 30 Times
Investment Deemed Inappropriate for Public Officials
Kim Nam-guk, a member of the Democratic Party of Korea who has been embroiled in suspicions of holding WEMIX, is also reported to have invested in the cryptocurrencies 'Klay' and 'BitTorrent.' Like WEMIX, these two cryptocurrencies once surged nearly 30-fold, raising questions about why a public official would focus so intensively on cryptocurrencies that attract short-term speculators.
Democratic Party of Korea lawmaker Kim Nam-guk, who has been embroiled in controversy over holding virtual assets, is entering his office at the National Assembly Members' Office Building in Yeouido, Seoul, on the morning of the 9th. [Image source=Yonhap News]
According to the cryptocurrency industry on the 11th, a cryptocurrency wallet presumed to be owned by Kim currently holds about 136 million KRW worth of Klay. Kim disclosed his wallet, created on January 20 last year, and the cryptocurrencies he holds in a statement. At that time, he anonymized the coins as Coin A worth 136 million KRW and Coin B worth 5,819 KRW. However, the address of the Klip wallet he owns can be inferred. Klip is a wallet based on the blockchain platform 'Klaytn.' Additionally, all wallet addresses and transaction histories can be checked on the Klaytn blockchain explorer. Searching for the wallet created on January 20 last year on the Klaytn blockchain explorer 'KlaytnScope' reveals a wallet holding 136 million KRW worth of Klay and 5,819 KRW worth of KlaySwap. Based on this, it is possible to infer that Kim holds Klay and KlaySwap.
The issue is why Kim invested in so-called 'junk coins,' which are unfamiliar to the general public, rather than well-known major cryptocurrencies like Bitcoin or Ethereum. Coincidentally, the cryptocurrencies Kim invested in, including WEMIX, are known for extreme volatility.
Klay was issued by Kakao's blockchain affiliate 'Ground X' and attracted significant attention from the cryptocurrency industry and investors after being listed on Binance, the world's largest exchange. Klay, which was priced around 180 KRW in August 2020, surged 27-fold to 4,943 KRW by April 2021. Calculating the market capitalization based on the total issuance of 10 billion Klay tokens, it reached 49 trillion KRW, surpassing the market cap of its parent company Kakao. Currently, Kakao's market cap is about 25 trillion KRW.
'Good for short-term trading... chasing highly volatile coins'
There are also allegations that Kim holds BitTorrent. Moon Jong-hyung, the standing deputy spokesperson of the People Power Party, criticized in a statement, "The value of the approximately 1.3 million WEMIX tokens Kim held was about 8.7 billion KRW at the time of holding, and BitTorrent, which he invested in 2021, is a typical junk coin that surged 62-fold and then repeatedly crashed in the same year."
According to opinions from the cryptocurrency industry, BitTorrent is also one of the cryptocurrencies with extreme volatility. As of January 2021, BitTorrent was priced at 0.3 KRW. It rose to around 2 KRW in February, when Kim invested, and then surged to 16 KRW in April. If BitTorrent was bought in February and sold two months later, the investment could have increased eightfold.
BitTorrent was notorious for its daily fluctuations between rises and falls. It is a cryptocurrency well-suited for so-called 'short-term trading.' On April 5, 2021, BitTorrent's low price was about 11 KRW, and the high was about 16 KRW. Buying at the low and selling at the high could have yielded a 45% daily return. However, Kim has not disclosed the exact timing of his BitTorrent purchases and sales.
It seems difficult for Kim, a public official, to avoid criticism for chasing only highly volatile cryptocurrencies. Initially, Kim was embroiled in controversy after it was revealed that he held about 6 billion KRW worth of WEMIX, which surged 100-fold between January and November 2021. He is known not to have held so-called 'major coins' like Bitcoin or Ethereum, which have lower volatility but offer steady returns. Kim explained that he invested about 80 million KRW in Ethereum in February 2016, but at that time, Ethereum was not listed on any domestic cryptocurrency exchanges, making it essentially a 'gamble.'
Meanwhile, Kim has yet to provide a clear explanation regarding the source of his initial cryptocurrency investment funds. As of the end of 2020, Kim's assets included LG Display stocks worth 940.02 million KRW and deposits of 147.69 million KRW. By the end of 2021, after selling all LG Display stocks, his deposits increased to 1.11581 billion KRW. The increase in deposits was due to the proceeds from stock sales and his parliamentary salary. Kim claims to have invested 1 billion KRW in cryptocurrencies after selling LG Display stocks in February 2021, but this does not align with his asset declarations.
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