MBN, a mainstream media outlet in South Korea, has reported that the South Korean government officially prohibited government officials from holding or trading cryptocurrency.
According to the report of MBN, even government officials who are not related to the South Korean Ministry of Strategy and Finance and Financial Services Commission are banned from holding or trading cryptocurrencies like bitcoin and Ethereum, to ensure that there exists no conflict of interest in regulating the local market.
The decision of the South Korean government to prohibit officials from investing in the cryptocurrency market was made after it was discovered that several officials within the local Financial Services Commission engaged in insider trading, by selling before the initial announcement of South Korean Justice Minister Park Sang-ki, who falsely claimed that the government would impose an outright ban on cryptocurrency trading in late 2017.
Justice Minister Park has since softened his stance on strict cryptocurrency regulation, as the South Korean government clarified that it has decided to take the approach of properly regulating the cryptocurrency market by protecting investors and businesses, rather than banning the industry and falling behind other leading economies like the US and Japan.
“All government ministries agree on the need for a government response to an overheating in cryptocurrency speculation and for a degree of regulation,” said Park in January, stepping back from his comments on the imposition of a nationwide ban on cryptocurrency trading.
South Korea’s opposition party representative Kim Seong-tae stated earlier this year that several government officials engaged in insider trading, and were notified about the rash statement made by Minister Park prior to his official press conference in December.
Representative Kim said in a statement translated by CCN.com:
“There were many reports suggesting that officials of the government of President Moon Jae-in engaged in cryptocurrency trading. Given that local government officials have taken profits from trading cryptocurrencies based on prior knowledge of the reports of the government regarding cryptocurrency regulation, it can be said with evidence that the government engaged in insider trading.”
Consequently, as a response to the allegations and the admission of insider trading by the Financial Services Commission, the South Korean government imposed a ban on trading targeted at government officials.
On March 1, the South Korean Personnel Innovation Department asked the Blue House, the executive office of President Moon Jae-in, and every other department within the South Korean government to refrain from trading cryptocurrencies, noting that penalty will be imposed to departments that engage in cryptocurrency investment.
South Korea’s Free Trade Commission, Financial Services Commission, and the Ministry of Strategy and Finance unanimously agreed on the decision of the South Korean Personnel Innovation Department to restrict cryptocurrency trading within the government, to ensure that government officials do not engage insider trading again in the future.
As for the public cryptocurrency market, the South Korean government has been regulating the market to allow newcomers and casual investors to invest in cryptocurrencies without regulatory concerns and strict policies. Local cryptocurrency exchanges have started to add new users once again.
Featured image from Shutterstock.
Last modified: May 20, 2020 9:02 PM UTC