On May 25, the South Korean National Assembly passed the “Kim Nam Guk Prevention Law,” which requires legislators and high-ranking government officials to disclose their cryptocurrency holdings.
According to News1, the amendments to the National Assembly Law were approved with broad support, ensuring that cryptocurrencies are included in the legislators’ register of private interests.
The new law aims to promote transparency and prevent abuses of authority
This new law aims to promote integrity and transparency in the government by addressing concerns about the potential misuse of cryptocurrencies by lawmakers and public officials.
Furthermore, the Public Officials Ethics Act amendment also mandates high-ranking public officials, including legislators, to register their cryptocurrency assets.
These measures were taken in response to suspicions and controversies surrounding Representative Kim Nam Guk, a member of the Democratic Party, who was accused of owning cryptocurrencies valued at up to 6 billion won (over $4.5 million). This raised concerns about possible conflicts of interest and insider trading activities.
Leaders from different political parties, including the People Power Party and the Democratic Party of Korea, expressed agreement on the need to pass this law during a meeting with the Speaker of the National Assembly.
Therefore, it is expected that with the approval of this law, transparency regarding the cryptocurrency holdings of public officials will become a reality in South Korea, strengthening public trust in institutions while enhancing cryptocurrency regulation.
South Korea continues to make progress in cryptocurrency regulation
In April 2023, the South Korean National Assembly passed the cryptocurrency regulation bill, overcoming the most significant initial obstacle before becoming law.
Hwang Suk-jin, a Special Committee on Digital Assets of the People Power Party member, stated that following the National Assembly’s approval, he expects it to become law in the first half of the year. It only requires approval from the legislative and judicial committees.
The bill requires cryptocurrency service providers to keep users’ funds separate and secure, avoiding mixing them with their own funds. This has been a controversial issue that several countries are including in their regulations following the alleged embezzlement by Sam Bank-Fried at the now-bankrupt exchange, FTX.
Likewise, the bill establishes penalties such as imprisonment and fines up to five times the illicit gains for those who fail to comply with the new regulations. Additionally, courts could impose maximum sentences such as life imprisonment in cases where reported losses to victims exceed $3.73 million.