Investment reports

Korean Financial Watchdog Requires Employees to File Crypto Investment Reports

In short

  • The Korean financial regulator has ordered its employees to file reports on their crypto investments.
  • In December 2017, an employee of the financial monitoring service allegedly made a profit trading crypto before the government’s cryptocurrency policies were announced.

The Korea Financial Services Commission (FSC) has ordered FSC cryptocurrency policy officials to file reports on their own crypto investments.

According Yonhap News Agencythose required to file reports include FSC employees whose role includes developing the country’s virtual currency policies and managing cryptocurrency exchange activities, as well as those tasked with monitoring and analyzing transactions of suspicious cryptocurrencies and to manage technological developments.

Officials of these departments are required to file reports on their cryptocurrency investments by May 7, 2021. An FSC official speaking to Yonhap News Agency is reported as the caller a “reminder of existing code of conduct” following recent personnel changes.

Under South Korea’s Capital Markets Law, FSC employees are only allowed to use one securities firm account for trading and are limited to 20 stock trades in a three-month period. . Senior officials are not allowed to trade stocks at all and can only invest in exchange-traded funds (ETFs) or foreign stocks.

When it comes to cryptocurrencies, however, there is no formal law in place; instead, an internal FSC rule requires employees to report to the agency’s president on their investments. The document also states that they must not invest in digital assets when in possession of information that has not yet been made public, but these measures are not binding and the penalties for violation are light. .

The December 2017 incident

According Yonhap News Agencyin December 2017, an employee of the Financial Monitoring Service made significant profits from cryptocurrency trading before the official announcement of policies and regulatory frameworks introduced by the South Korean government later that year.

The employee’s role was to work on the government’s cryptocurrency countermeasures program, and they reportedly made a profit of over 50% buying and selling cryptocurrency before the measures were announced.

These measures were implemented shortly after the price of Bitcoin first hit $20,000, and included the introduction of stricter KYC/AML rules for investors, as well as a ban on trading. cryptocurrencies on local exchanges for foreigners and miners.

Shortly before the announcement, rumors swirled that the South Korean government was about to completely ban cryptocurrency trading in the country, which authorities ultimately denied.

Later that same month, authorities carried out on-site inspections of major South Korean cryptocurrency exchanges, including Bithumb, Coinone, Korbit and Upbit, with false reports that the government would shut them down being partly responsible for the Bitcoin price drops 40% to below $11,500 in just 24 hours.

News of the FSC’s order to employees follows reports that South Korea is set to tighten guidelines on overseas cryptocurrency transactions, with the country’s government expressing concern over the ” speculative trading” and the possible use of Bitcoin in illegal activities.

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