South Korean officials recently approved a proposal to amend the country’s Public Service Ethics Act to include virtual assets, including cryptocurrencies.
Currently, government officials must report stocks, bonds, jewelry, gifted memberships and other assets worth more than 1 million won (about $760), but digital assets are not required to disclose such information under current South Korean law. The proposal follows a scandal involving Kim Nam-guk, a former member of the Democratic Party of Korea. Kim was accused of cashing out more than $4.5 million in cryptocurrency last year, before laws restricting such activity were changed.
In response to the allegations, Kim claimed that he was not required to disclose activities related to his digital assets, and that he never liquidated his assets reportedly around 800,000 Wemix coins ($4.5 million) but only Transfer them to another exchange. Kim then left the Democratic Party of Korea to become an independent as he rallied his defense. In response, the South Korean government has drafted an amendment to an existing law to include digital assets such as cryptocurrencies in legislation requiring the disclosure of other assets.
According to a translation of the government notice on the proposed amendments provided by Google Translate: "The recent discovery that a member of Congress owned a substantial amount of virtual assets was omitted from disclosure details of the legislator's estate was pointed to as a loophole in the law." The amendment was proposed and approved by a subcommittee on May 19. According to the document, the amendment will be brought to the plenary for a final vote on May 25.
Since the collapse of the Luna and Terra blockchains in May 2022, South Korean lawmakers have launched a series of activities around the regulation of cryptocurrencies and related assets. This includes a comprehensive cryptocurrency regulation package proposed in April 2023, which will seek to introduce tougher penalties for related crimes, increasing fines and prison terms ranging from one year to life imprisonment.
