The South Korean government is taking steps to address potential abuses of power in the realm of cryptocurrency. Under the proposed amendment to the Public Service Ethics Act, public officials would be required to disclose their cryptocurrency holdings. This move comes in light of concerns that certain officials are using their advantageous positions to protect their investments and gain from insider information, as well as concerns about possible proliferation or concealment of digital assets.
Currently, digital assets like cryptocurrency are not subject to the same registration and reporting requirements that other investments, such as real estate, cash, or stocks, must adhere to if they exceed $7,500 in value. However, the new amendment would necessitate that all virtual assets be registered, with no minimum amount. Furthermore, it would outline the methods for calculating and displaying the value of an individual’s digital assets, while also providing a means for accessing information from a virtual asset operator.
The draft of the amendment, submitted on May 19, is being reviewed by a committee before it is presented for a final vote in a plenary session on May 25.
One politician, Kim Nam-kuk, has recently come under fire for allegedly conducting suspicious crypto trades amounting to roughly $4.5 million. Kim was accused of withdrawing his cryptocurrency holdings from an exchange shortly before South Korea implemented a regulation in March 2022 requiring real-name transactions for cryptoassets. If this accusation proves true, it could amount to insider trading.
In response to this controversy, known as “Coin Gate,” the National Assembly’s Political Affairs Committee has proposed a resolution to establish a “voluntary” system for officials to report their cryptoasset holdings, which could potentially become a compulsory requirement in the future. Some critics, like MP Yoon Han-hong, believe that Kim could be just one of many officials involved in Coin Gate and have called for an investigation into all 300 sitting MPs.
South Korea’s Justice Ministry recently addressed claims that Minister Han Dong-hoon had refused to disclose his crypto holdings by asserting that the Ministry checks the “cryptoasset holding status of public officials working with cryptoasset [regulation]” and “public officials belonging to the Ministry of Justice” twice a year. This policy reportedly started in 2021, with the most recent check conducted in January of this year.
While the proposed amendment marks a step towards increased transparency and accountability in the world of cryptocurrency, some might argue that it could deter potential investors who might not want to deal with the hassle of reporting their holdings. Nevertheless, it appears that South Korea is determined to address the ethical and legal concerns currently surrounding cryptocurrency trading among its public officials.
Source: Cryptonews
