The South Korean government has reportedly de facto banned all government officials from holding and trading cryptocurrencies. Even if their crypto activities are not related to their jobs, public officials can still be subject to disciplinary actions.
South Korea has reportedly “issued a ban on virtual currency holdings and transactions to all government officials,” Maeil Business Newspaper reported.
According to the document entitled “Virtual currency holdings and transaction-related information for civil servants,” the publication elaborated:
The personnel department requested that they [civil servants] refrain from holding and trading virtual currency even if there is no job relevance…This is the first time the government has formulated a virtual currency ban for all public officials.
Disciplinary Actions Encouraged but Not Defined
The publication quoted the personnel affairs department explaining that if employees trade digital currencies for their personal benefit, they “are in violation of the prohibition of forbearance obligations under the civil servants’ law,” especially if trading is done during work hours. “Even if there is no job relevance,” the officials “could be subject to discipline,” the news outlet conveyed and quoted a high-ranking official explaining:
The disciplinary issue is not a quantitative cut, but a problem of interpretation of the law. Each ministry should judge the possibility of discipline.
The Korean Financial Services Commission (FSC), the Fair Trade Commission, and other related departments have already warned their employees “to refrain from investing in virtual currency,” the news outlet added. Furthermore, the head of the Office of Policy Coordinator, Hong Nam, told all public officials to do the same in January.
Last month, the Korean Anti-Corruption & Civil Rights Commission issued the “Code of Conduct Guide to Cryptocurrency” to all government departments and public agencies.
This document adds cryptocurrency to Article 12 of the Civil Servant Code of Conduct, prohibiting public officials from using “the information learned during their duties to assist in trading or investing” in cryptocurrency. In addition, the FSS, which is an independent agency, said that it will review its own code of conduct.
Earlier this year, a bill was introduced to require public officials to declare their cryptocurrency investments. It followed accusations that some government employees were involved in insider trading using undisclosed knowledge of future regulations as well as market manipulation.