In an unprecedented move signaling a tighter grasp on cryptocurrency transactions, South Korea’s National Assembly recently passed a landmark bill mandating lawmakers and high-ranking public officials to declare their virtual assets.
This pioneering initiative indicates the South Korean government’s increased scrutiny of the fast-growing but largely unregulated cryptocurrency space.
South Korea’s pioneering legislation
Dubbed as the ‘Kim Nam-guk Prevention Act,’ the bill received a unanimous nod in the National Assembly with amendments to both the National Assembly Act and the Public Service Ethics Act.
Under the new legislation, cryptocurrencies have been included in the list of private interests registered by members of the National Assembly.
With these amendments, it’s obligatory for the members of the 22nd National Assembly and beyond to explicitly specify cryptocurrency holdings in their property declarations.
Furthermore, even for the 21st National Assembly members, all virtual assets acquired and held from the beginning of their term to May 31 this year must be disclosed by the end of June.
This sweeping legislation also requires high-ranking public officials, in addition to the National Assembly members, to record their cryptocurrency assets.
The recent changes come in the wake of a significant scandal that involved certain members of the National Assembly moving sizable amounts of cryptocurrency.
Particularly, Democratic Party lawmaker Kim Nam-guk was suspected of possessing up to 6 billion won worth of cryptocurrency.
This incident sparked widespread suspicion of conflicts of interest, potential insider trading, and heated debates around investments during the standing committee.
Promoting transparency in cryptocurrency transactions
This legislative milestone in South Korea was born out of the need for increased transparency in cryptocurrency holdings.
In a meeting with National Assembly Speaker Kim Jin-pyo, floor leaders of both parties, including Yoon Jae-ok from People’s Power and Park Kwang-on of the Democratic Party, agreed on the necessity of the ‘Kim Nam-guk Prevention Act’.
The newly introduced bill is seen as a major step towards clarifying ambiguities surrounding crypto assets held by lawmakers and top officials.
It is hoped to quell public concerns over potential conflicts of interest and any possible misuse of insider information, while also enforcing a more robust crypto regulation system.
South Korea’s government seems to be taking an expedited approach towards these changes. The regulations were initially anticipated to be implemented in December 2023, following a six-month grace period.
However, following the recent controversies, lawmakers such as People Power Party’s Representative Yun Jae-ok have been urging for the enforcement of the change by July.
The passing of the ‘Kim Nam-guk Prevention Act’ sends a clear message about South Korea’s commitment to improving the transparency and accountability in the digital assets space.
As cryptocurrencies continue to gain mainstream acceptance, the need for robust legislative frameworks and ethical guidelines becomes increasingly critical.
South Korea’s recent legislative move may pave the way for other countries to follow suit and establish clearer crypto regulations, thus fostering an environment of transparency and trust in the cryptocurrency market.
