South Korean Government decided to prohibit public officials from Ministry of Science and ICT (MSIT), Ministry of Trade, Industry and Energy (MOTIE), and Financial Intelligence Unit (FIU) under Financial Services Commission (FSC) that perform duties associated with cryptocurrency from having and investing into cryptocurrencies. It decided to make prohibition of cryptocurrency speculation official when a moral hazard occurred early this year when an employee from Financial Supervisory Service (FSS) purchased large number of cryptocurrencies and sold them right before South Korean Government made this announcement.
According to Ministry of Personnel Management (MPM), The Anti-Corruption & Civil Rights Commission (ACRC), and FSC, South Korean Government recently designated public organizations that will be responsible for duties related to cryptocurrency and notified them of a code of conduct.
Based on the Public Servant’s Ethics, South Korean Government established a code of conduct regarding possession and exchange of cryptocurrencies by public officials per organization and prepared standards for sanctions. It even designated positions and departments within government departments that are related to cryptocurrency duties.
According to official documents obtained by The Electronic Times, about 100 organizations have come up as subjects of prohibition of speculation. In a revised plan, South Korean Government included standards for limiting cryptocurrency trades.
South Korean Government is prohibiting any trade of investment involving cryptocurrencies for one’s wealth and helping other’s wealth by providing information related to cryptocurrencies. Not only did South Korean Government block relevant investments towards duties, investigation, and examination related to establishment of policies on cryptocurrency, but it also blocked relevant investments towards duties that are recognized to be related to cryptocurrencies by directors of organizations.
South Korean Government also prepared for grounds of reporting possession of cryptocurrencies by public officials. If public officials possess cryptocurrencies while performing duties related to cryptocurrencies, they are obligated to report to their directors of organizations where they belong to. If directors believe that possession of cryptocurrencies can hinder one from performing fair work, they can take actions such as removing public officials from their duties.
MSIT, MOTIE, and FSC designated public officials who perform duties related to cryptocurrencies and created a list of people under supervision.
MSIT included the section chief of Convergence New Industry Department and two positions from the department and the section chief of Cyber Breach Response Team and two public officials from the team on its list of people under supervision.
MOTIE included the section chief of Industrial Complex Division and public officials responsible for industrial complexes on its list.
FSC included the director of FIU and every employee from FIU on its list. Every employee from Planning and Administration Office, Systematic Management Division, and Screening and Analysis Office is included in FSC’s list.
If employees on these lists do not report their possession of cryptocurrencies or buy cryptocurrencies, they will be under serious disciplinary actions.
Financial institutions related to cryptocurrency need to prepare their own code of conduct. It is confirmed that significant number of institutions such as FSS, Korea Deposit Insurance Corporation, Korea Asset Management Corporation, Korea Housing Finance Corporation, Korea Credit Guarantee Fund, Korea Development Bank, Industrial Bank of Korea, Korea Securities Depository, Korea Inclusive Finance Agency, Credit Counseling and Recovery Service, and Korea Exchange have established their code of conduct.
“We are going to carry out serious disciplinary actions based on the Act on the Prevention of Corruption and Civil Rights and a code of conduct for public officials if they look for personal profit through cryptocurrency speculation.” said a representative for ACRC. “We have ordered government departments to prepare detailed standards on limited trades based on information within their jurisdictions.”
Staff Reporter Gil, Jaeshik | osolgil@etnews.com