A new bill proposing that South Korean lawmakers, public officials and candidates must disclose their cryptocurrency holdings has been put forward. The legislative initiative aims to address a growing scandal concerning the cryptocurrency activities of an opposition lawmaker, whose case has been referred to the parliamentary ethics committee.
New Legislation to Introduce Crypto Reporting Requirements for South Korean Parliamentarians
The People Power Party in South Korea’s National Assembly is proposing changes to the Public Service Ethics Act through a draft legislation, which is set to oblige lawmakers, public officials and candidates to declare their cryptocurrencies. While the current law requires disclosure of assets that could cause conflicts of interest, such as cash, stocks and real estate, it does not mention cryptocurrencies.
The proposed regulations will require sitting lawmakers to report their digital holdings by the end of the next month, according to Korean press reports. Furthermore, the new crypto requirements will be stricter than those of other assets. Democratic Party member Chun Jae-soo explained, ‘Lawmakers are currently required to declare their cash and stock assets if they are worth more than 10 million won [$7,600], but with crypto holdings they will have to report even a single coin because the value fluctuates so widely’.
Similar amendments to the act have been proposed since 2018 but were thwarted in committees. The success of this proposal remains uncertain before it reaches a plenary session.
Bipartisan Ethics Committee to Mull Disciplinary Action Against Lawmaker Involved in Crypto Scandal
The proposed legislation comes at a time when a political scandal concerning the cryptocurrency investments of an opposition lawmaker has come to light. Kim Nam-kuk, a first-term National Assembly member, resigned from his position in the Democratic Party faction after facing accusations of conflict of interest and other irregularities.
The parliamentary ethics committee will review Kim’s case. In 2021, it was discovered that he owned around 800,000 Wemix coins, which were worth approximately 6 billion won ($4.5m) at the time. This huge sum of money was notably inconsistent with his modest profile. Also in 2021, Kim sponsored a bill to postpone the taxation of cryptocurrency incomes.
South Korean prosecutors have recently conducted a raid on two of the country’s biggest coin trading platforms, Upbit and Bithumb, as part of their investigation into Kim’s crypto trading. It is believed that he withdrew his coins before the Travel Rule could be enforced. The rule obliges exchanges to report personal data regarding senders and recipients of crypto transactions over 1 million won.