South Korea’s personnel ministry announced on Dec. 27 that high-ranking public officials will be required to disclose their crypto holdings. This new measure, which starts next year, is part of an effort to enhance transparency and accountability within the public sector.
According to an announcement, the property details — including cryptocurrencies — of about 5,800 elected officials and government employees will be publicly disclosed on the government’s “Public Ethics and Transparency Initiative” system.
The government has specifically created this portal to manage and display the financial disclosures of these officials. Previously, some Korean civil servants revealed their crypto investments in the government’s official gazette or on the websites of ministries or parliamentary chambers.
This action follows a May controversy involving Kim Nam-kuk, a member of the Democratic Party. Kim faced scrutiny for reportedly holding at least $4.5 million in Wemix (WEMIX) tokens created by the South Korean blockchain game developer Wemade. His ownership of Wemix raised concerns about potential conflicts of interest, using insider information, and even money laundering.
In May, the legislative push for increased transparency gained momentum. Lawmakers passed two bills mandating government officials to reveal their crypto assets as part of their annual asset declarations.
Moreover, five major South Korean exchanges, Coinone, Korbit, Upbit, Bithumb, and Gopax, will launch “information provision systems” by June 2024. These systems aim to simplify the registration of information about cryptocurrency investments, further facilitating the tracking of officials’ crypto assets.
Kim Seung-ho, Minister of Personnel Management, expressed optimism about the measures.
“We expect that the transparency of the public service community will be further increased through the implementation of an integrated service for public official property disclosure and property registration of virtual assets.”
New Crypto Legislation
In June this year, South Korea’s National Assembly passed legislation to better protect crypto investors. New legislation, comprising 19 crypto bills, empowers the Bank of Korea and the FSC to oversee crypto operators and custodians.
Moreover, in July, the FSC said it would require domestic firms to disclose crypto holdings from next year as part of new accounting rules. The new rules will also require crypto issuers to reveal information, including business models, internal accounting policies, and token details.
Beyond these measures, the Democratic Party of Korea, which holds 167 out of 300 seats in the National Assembly, obliged its potential candidates to disclose details of their digital assets on their party profiles as well.
With crypto holding disclosure requirements, authorities can better monitor transactions and identify fraud or compliance violations. Furthermore, experts believe the transparency initiative may encourage citizens and businesses to report their taxes more thoroughly.