Independent Rep. Kim Nam-guk (41) is investigating various allegations surrounding the controversial cryptocurrency WEMIX, which is held in large quantities.

According to legal sources on the 1st, the 6th Criminal Division of the Seoul Southern District Prosecutor's Office (Deputy Chief Prosecutor Lee Joon-dong) seized and searched Wemade, the issuer of WEMIX, in Bundang-gu, Seongnam-si, Gyeonggi, on the 24th and 26th of last month to secure Rep. Kim's WEMIX transaction details.

Rep. Kim transferred more than 1,2 WEMIX tokens from the cryptocurrency exchange Bithumb to the Upbit e-wallet in January and February last year.

The Financial Intelligence and Analysis Unit (FIU) determined this to be a suspicious transaction and notified the prosecutor's office, and traces of other cryptocurrency transactions were revealed, escalating the controversy over Rep. Kim's coin.

On the 85th of last month, prosecutors confiscated and searched Bithumb and Upbit, where Rep. Kim's WEMIX coin was organized.

At the time, the search warrant included charges of violating the Political Finance Act, tax evasion, and violating the Concealment of Proceeds of Crime Act.

Prosecutors are looking into Rep. Kim's coin transactions in general, including the seizure and search of Ozis, which operated Clayswap, a coin deposit and exchange service that Rep. Kim allegedly used, on the 5nd of last month.

Prosecutors are also investigating accusations that Wemade caused losses to investors by issuing large amounts of circulating volumes.

The Financial Investigation Division 15 of the Seoul Southern District Prosecutor's Office (Deputy Chief Prosecutor Chae Hee-man) seized and searched Upbit, Bithumb, and Coinone to obtain data related to WEMIX's issuance and distribution history.

More than 22 WEMIX investors filed a complaint with the prosecutor's office on March 1 against the issuer, Wemade CEO Jang Hyun-kook, on charges of fraud and fraudulent fraudulent transactions under the Capital Markets Act.

The investors alleged that "Wemade deceived investors with deliberate falsehoods about the circulation volume in the process of issuing and selling WEMIX, causing great losses."

The Joint Association of Digital Asset Exchanges (DAXA) suspended trading in November last year, saying that Wemade had distributed more volumes to the market than originally announced.

Wemade appealed this decision and filed a motion for a preliminary injunction, but the court also recognized the overdistribution.

In the end, WEMIX was all closed on Upbit, Bithumb, and Coinone in December last year, and was relisted only on Coinone in February this year.

The coin industry has raised suspicions that this overissued WEMIX coin was passed on to Rep. Kim for free.

Rep. Kim was also embroiled in suspicions that he used undisclosed information obtained from the game industry such as Wemade for coin trading.

Initially, the Wemade accusation case was handled by the Criminal Investigation Division 20, which was investigating the controversy over Rep. Kim's coin holdings, but was recently reassigned to the Financial Investigation Division 11, which has extensive experience in coin-related investigations.

Prosecutors plan to analyze the seized materials to determine whether there were any misconduct in the WEMIX distribution process and to look into the connection with Rep. Kim.

(Photo=Yonhap News)