On May 25, South Korea’s National Assembly passed the “Kim Nam Guk Prevention Law,” which requires legislators and high-ranking government officials to disclose their cryptocurrency holdings.
According to news1Amendments to the National Assembly law were approved with broad support, ensuring that cryptocurrencies are included in the Register of Private Interests of legislators.
This new law aims to promote probity and transparency in government by addressing concerns about the potential misuse of cryptocurrencies by lawmakers and public officials.
Furthermore, the Public Officials Ethics Act amendment also mandates high-ranking public officials, including legislators, to register their cryptocurrency assets.
The measures were taken in response to the suspicion and controversy surrounding Representative Kim Nam Guk, a member of the Democratic Party, who was accused of owning 6 billion won (more than $4.5 million) worth of cryptocurrency. It raised concerns about potential conflicts of interest and insider trading activities.
Leaders of various political parties, including the People’s Power Party and the Democratic Party of Korea, agreed on the need to pass this law during a meeting with the Speaker of the National Assembly.
Therefore, it is expected that with the approval of this law, transparency regarding cryptocurrency holdings of public officials will become a reality in South Korea, strengthening public trust in institutions while enhancing cryptocurrency regulation.
South Korea Continues to Make Progress in Cryptocurrency Regulation
In April 2023, the South Korean National Assembly passed a cryptocurrency regulation bill, clearing the most important initial hurdle before becoming law.
Hwang Suk-jin, a member of the People’s Power party on the Special Committee on Digital Assets, said that after the National Assembly’s approval, he expects it to become law in the first half of the year. It only requires approval from the legislative and judicial committees.
The bill requires cryptocurrency service providers to keep user funds separate and secure, avoiding mixing them with their own funds. This has been a contentious issue that many countries are involved in with their regulations following the alleged embezzlement by Sam Bank Fried at the now-bankrupt exchange, FTX.
Similarly, the Bill sets up jail terms and fines of up to five times the illegal profits for those who fail to comply with the new rules. Additionally, courts can impose maximum sentences of up to life in prison in cases where victims have suffered more than $3.73 million in damages.