In a unanimous decision, South Korean lawmakers have passed a new bill mandating public officials and candidates to disclose their cryptocurrency holdings starting in 2024.
The legislation, reported by local news outlet Chosun-Ilbo, not only demands transparency but also imposes restrictions on the investment amounts allowed for officials engaged in the cryptocurrency sector.
An amendment to the Public Service Ethics Act
Starting from Jan. 1, 2024, high-ranking public officials in South Korea, including National Assembly members, will be obligated to disclose their cryptocurrency holdings, irrespective of the quantity owned.
The new requirement comes as an amendment to the country’s Public Service Ethics Act, which previously mandated officials to report assets such as cash, stocks, and bonds exceeding 10 million Korean won (approximately US$7,572).
Notably, cryptocurrencies and other virtual assets were previously not included in the disclosure requirements.
The bill, spearheaded by conservative lawmaker Lee Man-hee, aims to enhance transparency and accountability within the public sector.
Alongside the disclosure provision, the legislation also sets limits on the investment amount allowed for officials engaged in the cryptocurrency sector. This measure is designed to regulate the involvement of public servants in the rapidly expanding crypto industry and mitigate potential conflicts of interest.
All 269 lawmakers present at the National Assembly demonstrated unanimous support for the amendment to the National Assembly Act. With a resounding 269 votes in favor, the proposed amendment secured overwhelming backing from the assembly members.
Similarly, the amendment to the Public Service Ethics Act, which expands the reporting obligation to encompass high-ranking public officials, garnered a significant majority of 268 votes out of the total 268 lawmakers present during the voting process.
The foundation for new mandates
The foundation for the new mandate came shortly after Kim Nam-kuk, a former member of South Korea’s main opposition Democratic Party, was found in possession of crypto assets valued at a minimum of $4.5 million, which were held on the Wemix exchange.
The finding immediately raised concerns regarding possible instances of money laundering, conflicts of interest, and the potential exploitation of insider information.
In contrast to countries that have opted for outright bans on cryptocurrencies following concerns, like China and Saudi Arabia, South Korea has chosen a regulatory approach despite the challenges associated with digital assets.