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South Korea Passes 'Kim Nam-guk Prevention Law' to Regulate Officials' Crypto Holdings

Key Takeaways
  • South Korea passes law for officials to report cryptocurrency holdings
  • Response to scandal of National Assembly members moving crypto
  • Law requires disclosure of crypto assets by lawmakers and officials
South Korea Passes '

South Korea Enacts 'Kim Nam-guk Prevention Law' to Tackle Crypto Scandal and Enhance Transparency Among Public Officials

The South Korean government has taken significant steps to address the issue of cryptocurrency holdings among public officials with the introduction of the "Kim Nam-guk Prevention Law." This legislation follows a scandal involving National Assembly members who were found to have moved substantial amounts of cryptocurrency. The new law, which has been unanimously passed by the National Assembly, requires lawmakers and high-ranking public officials to report their crypto assets.

The bill includes amendments to the National Assembly Act and the Public Service Ethics Act. The amendment to the National Assembly Act officially designates cryptocurrency as registered property for lawmakers, while the amendment to the Public Service Ethics Act mandates the disclosure of cryptocurrency assets by both high-ranking public officials and National Assembly members.

The catalyst for these legal developments was the discovery that Kim Nam-kuk, a former member of the main opposition Democratic Party, had held at least $4.5 million in crypto assets on the Wemix exchange. This revelation raised concerns about potential money laundering, conflicts of interest, and the misuse of insider information.

To address these concerns and prevent similar incidents, the South Korean government initiated the "Kim Nam-guk Prevention Law." The key aspect of this legal change is the inclusion of all crypto holdings exceeding $760 in wealth reporting by senior officials, treating them on par with cash, stocks, bonds, gold, and other assets.

Initially, the legislation was slated to take effect in December 2023 after a six-month grace period. However, Representative Yun Jae-ok of the People Power Party and other lawmakers have advocated for the enforcement of the law by July, urging swifter action to ensure greater transparency and accountability among public officials.

In summary, the South Korean government has responded to the cryptocurrency scandal involving National Assembly members by passing the "Kim Nam-guk Prevention Law," which mandates the reporting of crypto assets by lawmakers and high-ranking public officials. The aim is to enhance transparency, prevent illicit activities, and address concerns over conflicts of interest.

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