Korean Lawmaker Accused of Attacking Upbit to Benefit Son at Bithumb

South Korean police are investigating ruling party lawmaker Kim Byung-kee for allegedly using his position to attack cryptocurrency exchange Upbit after his son joined rival platform Bithumb. Kim, a 25-year veteran of the National Intelligence Service, faces multiple corruption allegations, including nepotism and leveraging his political influence for family benefit. The case highlights regulatory risks in Korea's crypto market, where Upbit and Bithumb control 93% of trading volume.

Kim reportedly began showing interest in both Upbit and Bithumb after being transferred to the National Assembly's Political Affairs Committee in 2024. He met with Dunamu's CEO and brought his younger son to dinner meetings, according to an aide who provided information to investigators. The son ultimately joined Bithumb in January 2025. Shortly afterward, Kim directed staff to prepare questions attacking Dunamu's market dominance and reportedly told them the company 'needs to be taught a lesson'.

The alleged pattern of nepotism extends beyond Bithumb. Kim reportedly intervened to secure his elder son's employment at the National Intelligence Service in 2016. A leaked recording suggested Kim's wife pressured an NIS official to ensure her son was hired. The official allegedly promised to create a special recruitment process around the son's favor.

Why Did This Happen?

Kim's actions reportedly began after his son joined Bithumb. The aide told investigators that Kim instructed staff to prepare questions attacking Upbit and criticized Dunamu's market dominance. In February 2025, Kim formally questioned the Financial Services Commission about potential monopolistic practices by Upbit's operator, Dunamu. The FSC chairman responded that the commission would consult with the Fair Trade Commission on regulatory measures.

The aide's testimony suggested that Kim's criticisms of Upbit were motivated by his son's employment at Bithumb. The aide stated that I believe he made negative inquiries against a competitor because his son joined Bithumb. This raises concerns about potential conflicts of interest and the influence of personal relationships on regulatory oversight.

What Are Analysts Watching Next?

The case underscores broader regulatory risks in Korea's crypto market. The market is highly concentrated, with Upbit and Bithumb dominating trading volume. This concentration has led to increased scrutiny from regulators, who are concerned about market fairness and transparency.

Analysts are also watching how the investigation will affect public trust in regulatory bodies. If proven guilty, Kim's actions could be seen as undermining the integrity of the regulatory process. This could lead to calls for reforms to prevent conflicts of interest among lawmakers and regulators.

Regulatory authorities have been intensifying their oversight of major exchanges in recent months. Bithumb, Upbit, and other major platforms have faced fines for anti-money laundering and know-your-customer violations. The investigation into Kim could add to the pressure on exchanges to improve compliance and transparency.

The outcome of the investigation may also influence future policy decisions related to crypto market regulation. Regulators are considering new enforcement tools, such as a payment freeze system, to prevent suspects from concealing profits. These measures reflect a broader effort to align crypto enforcement with existing stock market practices.

Investors and market participants are closely watching the developments. The case could reinforce concerns about market manipulation and regulatory bias, particularly in a sector where a few dominant players control a large share of trading activity. Any changes in regulatory approach could affect market dynamics and investor behavior.

The investigation into Kim Byung-kee is ongoing. If found guilty, he could face disciplinary action or legal consequences. The case also highlights the need for stronger safeguards to ensure that political influence does not interfere with regulatory oversight in the crypto industry.