As the popularity of crypto assets continues to rise, countries worldwide are adjusting to meet the growing demand for Bitcoin and other crypto. While some nations have chosen to regulate the crypto market, others have opted for outright bans. South Korea, despite facing various challenges related to crypto assets, has taken a regulatory approach rather than imposing a ban.
As part of its ongoing regulatory efforts, the National Assembly of South Korea recently passed a bill related to crypto. This bill mandated that all high-ranking public officials [above Grade 4] are obligated to report their Bitcoin and other crypto holdings. The unanimous passing of this bill shows South Korea’s commitment to increasing transparency and accountability within the crypto space.
The amendment to the National Assembly Act, received unanimous support from all 269 lawmakers present, with 269 votes in favor. Similarly, the amendment to the Public Service Ethics Act, which extends the reporting requirement to high-ranking public officials, garnered 268 votes from the 268 lawmakers.
Under the recently passed bill in South Korea, the magnitude or value of crypto holdings is not a determining factor. The requirement for lawmakers and high-ranking public officials to report their holdings applies regardless of the amount they possess. Starting from Jan. 1, 2024, these individuals will be obligated to disclose their crypto holdings.
Previously, under South Korea’s Public Service Ethics Act, officials were required to disclose their owned assets, including cash, stocks, and bonds. This was applicable only if their value exceeded 10 million Korean won or $7,572. However, crypto and other virtual assets were not specifically added in the reporting requirements.
How did this law come to be in South Korea?
Earlier this month, it was discovered that Kim Nam-kuk was part of a scandal. He was previously a member of South Korea’s main opposition Democratic Party. He had held at least $4.5 million worth of crypto assets on the Wemix exchange. This revelation raised immediate concerns regarding potential money laundering, conflicts of interest, and the potential use of insider information. The official is currently under investigation.
In response to the concerns raised by the case concerning Kim Nam-kuk, the South Korean government decided to take swift action. This was done by initiating the “Kim Nam-guk Prevention Law.” The key aspect of this legal change is to include all crypto holdings in the wealth reporting requirements for senior officials.