A parliamentary aide has been caught contradicting himself over remarks that implicated his own superior in an alleged campaign to pressure a rival cryptocurrency exchange — and the revelation that he was simultaneously on the payroll of a competing exchange has transformed a minor political embarrassment into a full-blown scandal over conflicts of interest and covert lobbying.
From "the MP ordered it" to "just my personal view"
The affair centres on aide A, a member of staff in the office of Kim Byeong-gi, a lawmaker of the ruling Democratic Party of Korea. According to multiple accounts, A initially stated that Kim had instructed him to "come down hard on Upbit" — a reference to Dunamu's Upbit, South Korea's largest cryptocurrency exchange by trading volume. The claim, if true, would suggest a deliberate and politically orchestrated campaign to harm a specific private company through regulatory pressure.
A subsequently reversed himself, insisting the remarks reflected his personal opinion and carried no instruction from the lawmaker. For a junior aide to cite his superior by name and then retract the claim is highly unusual. Both inside and outside political circles, observers have raised the possibility that the reversal was made under external pressure.
The central allegation: a conflict of interest hiding in plain sight
What makes the episode far more serious is the disclosure that, while serving as a parliamentary aide, A was concurrently employed as a paid adviser to Bithumb — Upbit's principal domestic rival. The two exchanges together dominate South Korea's won-denominated crypto market: Upbit commands a share of between 70% and 80%, while Bithumb trails with roughly 20%.
If a legislative aide was simultaneously drawing a salary from a competing exchange whilst making statements designed to weaken that exchange's rival, the legal exposure could be considerable. South Korea's State Public Officials Act prohibits civil servants from engaging in profit-making activities alongside their official duties. More pointedly, the Act on the Prevention of Conflicts of Interest in Public Service, which came into force in 2022, requires public officials to disclose and recuse themselves from matters in which they hold a private financial interest.
"An aide performing legislative and policy support functions whilst serving as an adviser to a company in the same industry poses a grave threat to the impartiality of public duties," said one legal expert.
Politics and crypto: an uncomfortably close relationship
The affair illuminates a broader structural problem: as South Korea's cryptocurrency industry pushes for formal regulatory recognition, it has become a fertile ground for political lobbying. The legislative process around the Virtual Asset User Protection Act, passed in 2023, and subsequent second-stage legislation debated through 2024 have been accompanied by intense behind-the-scenes competition among exchanges to shape the rules in their favour.
Beyond formal industry associations such as the Korea Blockchain Association, exchanges have developed a well-documented habit of recruiting parliamentary aides, former financial regulators, lawyers, and journalists as advisers and consultants — a form of quiet influence that insiders describe as commonplace. Corporate disclosures and sporadic press reports have confirmed that several major South Korean exchanges maintain advisory boards stocked with former officials and public figures.
How other jurisdictions handle it
The contrast with more tightly regulated markets is instructive. In the United States, the Lobbying Disclosure Act imposes a cooling-off period of one to two years on former congressional aides before they may register as lobbyists, and prohibits serving aides from engaging in paid outside activities that intersect with their official duties. Lobbying of the Securities and Exchange Commission's crypto task force must be disclosed on a federal public database.
The European Union, during the passage of its Markets in Crypto-Assets (MiCA) regulation in 2023, ran a parallel lobbying transparency regime requiring all contacts between parliamentary offices and the crypto industry to be publicly registered. South Korea, by comparison, has no equivalent obligation for parliamentary aides to disclose outside employment or financial relationships with industry — a lacuna that experts have long identified as a structural vulnerability.
The lawmaker's response
Kim Byeong-gi's office has denied that any instruction was ever given to target Upbit, characterising the aide's original remarks as entirely unconnected to the lawmaker himself. Opposition figures and parts of the crypto industry remain unconvinced. "There is no satisfactory explanation for why the aide mentioned the lawmaker's name in the first place," said one critic. Outstanding questions include whether Kim's office was aware of the Bithumb advisory role, and whether any legally required disclosure of that relationship was ever made.
A systemic failure, not merely a personal one
On its surface, the affair began with a single aide's contradictory statements. Beneath that surface lies a structural problem: exchanges generating trillions of won in annual revenue have powerful incentives to shape the legislation that governs them, and the institutional safeguards designed to keep that influence in check remain conspicuously weak.
Experts have called for a range of reforms: mandatory disclosure of outside employment by parliamentary aides, a compulsory lobbying register for the crypto industry, and an expanded public disclosure regime for conflicts of interest within legislative offices. If South Korea is to align itself with the global trend towards regulated, trustworthy digital-asset markets, establishing the political neutrality of its regulatory process may be the most urgent task of all.