South Korean lawmakers are set to vote on a bill that would require disclosure of cryptocurrency assets by officials in response to a recent political scandal.
The proposal aims to amend the Public Service Ethics Act to include virtual assets, such as cryptocurrencies, in the list of holdings that government officials must report. Currently, only traditional assets like stocks and bonds exceeding 1 million Korean won (approximately $760) require disclosure.
The push for this legislation follows a scandal involving a former member of the South Korean Democratic Party, Kim Nam-kuk, who allegedly cashed out over $4.5 million in cryptocurrency prior to an impending law change. Kim argues that he did not violate any disclosure rules as digital assets were not covered at the time and claims to have transferred the funds to another exchange rather than liquidating them.
In light of the controversy, the South Korean government has drafted an amendment to ensure that digital assets are included in the disclosure requirements for lawmakers. The proposed amendment has passed through a subcommittee and is scheduled for a final vote in a plenary session on May 25.
This move reflects the increased regulatory activity in South Korea regarding cryptocurrencies and related assets since the collapse of the Luna and Terra blockchain in May 2022. In April 2023, a comprehensive cryptocurrency regulatory package was proposed, aiming to impose stricter penalties, including heavier fines and longer prison sentences, for cryptocurrency-related offenses.
