South Korea’s Financial Services Commission (FSC) Chairman Eun Sung-soo has asked the regulator’s staff responsible for drafting guidelines for digital assets to review their cryptocurrencies by the 7th. May, local newspaper The Korea Times reported today.
With this action, the FSC aims to identify possible employee misconduct and investigate whether government employees have abused their power and inside information to profit from cryptocurrencies.
Two weeks before disclosure
According to the report, the new requirement applies to FSB employees directly involved in the development and enforcement of cryptographic policies and laws. In addition, officials responsible for investigating, monitoring and reporting on crypto transactions, exchanges and the development of blockchain technology will also have to report their crypto holdings.
The government apparently wants to avoid a repeat of the recent scandal involving the state-owned Korea Land and Housing Corp (LH), the statement said. Last year, many LH employees who were supervised by the state agency were caught misusing access to government-managed data to make extra money.
For example, in September 2020, a senior official at Pocheon City Hall in Gyeonggi Province bought a 2,600-square-meter piece of land in the city for 4 billion won ($3.5 million). But because he was responsible for public transportation policy, he had inside information about the upcoming expansion of subway stations in the region. As a result, the price of his land doubled.
In addition to this case, 46 other LG employees are currently being prosecuted. In total, they bought more than 24 billion won ($21.6 million) worth of land based on insider information.
No strict rules
However, in the case of cryptocurrencies, it is even more difficult to detect misconduct, as the sector is not strictly regulated in South Korea. For example, there are. For example, FSC employees are strictly restricted from investing in stocks and some are not allowed to trade in securities at all.
Meanwhile, these restrictions do not apply to cryptocurrencies, although employees must report to the FSC Chairman when investing in digital assets and may not make investments based on information that has not been made public. However, these rules would not be binding and the penalties for violations would be quite mild.
As reported, Song Soo also said recently that all cryptocurrency exchanges in the country must comply with the regulations by September or risk being shut down.
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