South Korean lawmakers could soon find themselves “obliged” to declare their crypto holdings following a national outcry over alleged “insider trading.” The National Assembly’s Political Affairs Committee has co-created a resolution that would create a “voluntary” system whereby they are requested to report their crypto asset holdings. However, South Korean media outlets have claimed that any such system is likely to become a de facto mandatory protocol.
This development is closely linked to the scandal involving MP Kim Nam-kuk, which has been dubbed “Coin Gate” by the media. Kim, a former rising star in the main opposition Democratic Party, has stepped down amid the controversy. He denies wrongdoing but has been accused of carrying out suspicious crypto trades worth approximately $4.5 million. Multiple reports have accused Kim of withdrawing his crypto holdings from domestic exchanges prior to the implementation of the Travel Rule in March 2022. If proven true, this may constitute insider trading, implying that he acted on the knowledge of a forthcoming legal change.
The nation’s two largest crypto exchanges, Upbit and Bithumb, were recently raided by prosecutors investigating the charges. This uproar seemingly spurred lawmakers into action, with senior figures from all major political parties attending the committee’s behind-closed-doors session on May 16.
Subcommittees have already received the committee’s proposal and began the reviewing process, although the matter is unlikely to stop there. Various lawmakers are calling for an investigation into all 300 members of the National Assembly, suspecting that Kim may not be the only MP involved in “Coin Gate.” People’s Power MP Yoon Han-hong, a member of the Political Affairs Committee, has called for a probe into all 300 sitting MPs.
Currently, South Korean law stipulates that lawmakers must declare real estate, cash, or stock holdings worth over $7,500, but no such legal requirements exist for crypto holdings. MPs have suggested including the new resolution as a clause in a forthcoming crypto holders’ “protection” act, which has already reached advanced committee stages ahead of an Assembly vote.
Other nations, such as Ukraine, have already adopted crypto declaration protocols for their MPs. In Ukraine, lawmakers have previously been obliged to make yearly crypto-holding disclosures. The move to declare crypto holdings shines a light on the broader issue of transparency within the rapidly growing crypto space and its integration into the traditional financial and political systems. As the South Korean situation unfolds, it remains crucial to evaluate both the pros and cons of such regulation and its potential implications on lawmakers and the cryptocurrency market alike.
Source: Cryptonews
