In a significant move towards enhancing transparency and integrity within its public sector, South Korea has mandated that approximately 290,000 public sector employees, including high-ranking officials above Grade 4, disclose their cryptocurrency holdings starting from February 2024. This new requirement applies to a range of officials, including those in central and local government, and covers not only the employees themselves but also their spouses and next of kin.
This initiative, part of a broader effort to promote ethical standards and prevent conflicts of interest, comes in the wake of the Coin Gate political scandal. This scandal involved allegations of insider trading by a lawmaker who was a member of a crypto-related parliamentary committee. In response, South Korea’s Ministry of Personnel Management announced that all virtual assets held, regardless of amount or quantity, must be reported.
The disclosure of these assets will be made through a unified asset declaration platform, known as the Public Official Ethics System (PETI). This system is designed to offer a more streamlined and transparent approach for public officials to report their holdings, including cryptocurrencies. The government plans to use the collected data to create a publicly accessible, searchable database, allowing citizens to check on public sector workers’ crypto holdings. Failure to comply with these disclosure requirements could result in penalties such as fines, dismissal, or other disciplinary actions.
South Korea’s decision reflects a growing global trend of increased regulatory scrutiny surrounding digital assets. As cryptocurrencies continue to gain mainstream acceptance, governments worldwide are implementing measures to ensure proper regulation and oversight of this evolving financial landscape.
This move by South Korea not only marks a significant step forward for the nation in terms of public service transparency but could also serve as a model for international efforts to regulate and oversee the cryptocurrency dealings of government employees.