Korea is strengthening its crypto regulations, imposing reporting requirements on all employees of its Financial Services Commission.
Korean Financial Services Commission (FSC) Chairman Eun Sung-soo has ordered FSC officials who hold crypto to file reports on their investments by May 7.
The FSC employees subject to reporting are those who manage virtual currency tech developments, those responsible for drafting and applying virtual currency laws, and those who report on and manage crypto exchanges.
An article from the Korea Times noted the comparative lack of regulation surrounding FSC officials’ investments in crypto when compared to traditional financial products.
While FSC employees are expected to notify chairman Sung-soo if they have speculated on crypto, and are prohibited from making investments using information they have gained ahead of the public through their privileged position, Korea Times reporter, Lee Kyung-min, noted soft penalties for policy violations:
“These measures are not binding, and penalties for violating them are not strong.”
The FSC chairman has recently drawn anger from South Korea’s crypto community, after urging adults not to set a negative example to younger generations through risky speculation.
“Adults are responsible for leading young people who are going the wrong way. It’s too risky to trade them considering their high volatility in prices,” he said.
Public backlash has seen nearly 130,000 residents sign an online petition calling for Sung-soo to resign over the comments, with the petition reading:
« It is beyond condescending and hypocritical for Eun to lecture today’s hard-working young people who are finding it unimaginably hard to own a home, much less have financial assets of any sort. Eun saw his real estate value increase over the past few years. He has no standing to lecture us about what is right and wrong. »
South Korea has recently sought to strengthen its regulatory oversight of crypto assets, with the National Assembly passing a bill in March requiring permits for local crypto exchanges based on stringent identity verification.
Businesses handling crypto assets will also face stiff penalties for failing to meet reporting requirements, with the FSC threatening up to five years imprisonment for reporting failures.
In February, Cointelegraph reported that South Korea’s finance ministry had fast-tracked the introduction of a controversial 20% tax on crypto profits over $2,300, which is now slated to pass into law on Jan. 1, 2022.
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Author: Brian Quarmby