July 21, 2024
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Legislators in South Korea Push for Transparency in Reporting Crypto Assets Following Political Scandal

A new proposal has been put forth by legislators in South Korea in response to a recent political scandal, to ensure that South Korean officials report their digital asset holdings above approximately $760. South Korean officials have recently approved a proposal to amend the Public Service Ethics Act of the country, which would encompass virtual assets, including cryptocurrency. Presently, government officials are required to disclose stocks, bonds, jewellery, gifted memberships, and other holdings valued at over 1 million Korean won (around $760). However, there is no obligation to disclose digital assets under the current South Korean law.

The proposal arises after a scandal involving Kim Nam-kuk, a former member of the South Korean Democratic Party. Kim has been accused of converting over $4.5 million in cryptocurrency last year, before an impending change in the law that would have restricted such actions. In response to these allegations, Kim argues that he was not obliged to disclose his digital asset activities. He asserts that he did not liquidate his holdings, which reportedly amounted to around 800,000 Wemix coins ($4.5 million), but instead transferred them to another exchange. Consequently, Kim left the South Korean Democratic Party and became independent as he prepared his defence.

The South Korean government has taken action by drafting an amendment to the existing law that would incorporate digital assets, such as cryptocurrency, into the requirement of disclosing other assets. A government notice, translated by Google Translate, states, “Recently, it was discovered that an active member of the National Assembly possesses a significant amount of virtual assets, which are not disclosed in the lawmaker’s property details, highlighting a loophole in the law.”

The amendment was proposed and approved by a subcommittee on May 19. As per the document, it will be presented for a final vote during a plenary session on May 25. South Korean lawmakers have been actively addressing cryptocurrency and related asset regulations since the collapse of Luna and the Terra blockchain in May 2022. In April 2023, a comprehensive cryptocurrency regulatory package was proposed to impose stricter penalties for associated crimes, including increased fines and sentences ranging from one year to life imprisonment.

Image by Freepik

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