South Korea has introduced new legislation mandating high-ranking public officials to disclose their cryptocurrency holdings, marking a major step towards enhancing transparency in the public sector. This move comes in response to growing concerns about potential conflicts of interest and misuse of insider information within government ranks.
Mandatory Crypto Disclosure for Public Officials
Starting next year, about 5,800 officials will be required to publicly declare their crypto and other asset holdings. This disclosure will be facilitated through the Public Official Ethics System (PETI), an integrated service designed to streamline and increase the transparency of asset reporting by public servants.
Kim Seung-ho, the director of personnel management, expressed his positive outlook on the impact of this new system. He anticipates that the integrated service for public official property disclosure, including virtual assets, will significantly enhance the transparency of the public service community.
Response to the Wemix Token Scandal
The move follows a scandal in May 2023 involving Kim Nam-kuk, a member of the Democratic Party. He faced scrutiny for allegedly holding over $4.5 million in Wemix tokens, developed by South Korean blockchain company Wemade. The scandal raised serious concerns about the integrity of public officials and the potential for corruption.
As a result, lawmakers passed two bills requiring elected officials and high-ranking government personnel to report their cryptocurrency assets in their annual asset declarations. This legislative action is aimed at bolstering public trust by making government officials’ financial interests, especially in the crypto sector, more transparent.
New Information System by Crypto Exchanges
Additionally, major domestic cryptocurrency exchanges in South Korea – including Upbit, Bithumb, Coinone, Korbit, and Gopax – are planning to develop a separate information system by June of next year. This system is expected to be instrumental in the property registration process, providing a reliable platform for accurate and efficient disclosure of cryptocurrency holdings.
These developments underscore South Korea’s commitment to ensuring integrity and transparency within its public sector, especially concerning the involvement of officials in the rapidly evolving cryptocurrency market.