A South Korean committee approved a bill on Monday requiring legislators to reveal their crypto assets following a scandal involving a high-ranking lawmaker’s undisclosed investments earlier this month.
Existing legislation mandates that lawmakers divulge their traditional assets, such as cash, stocks and real estate, within a month following their election.
It’s meant to ensure transparency while deterring high-ranking officials from engaging in any possible conflicts of interest. But the law previously fell short of capturing crypto proceeds.
Under proposed amendments, serving members of the Assembly are obligated to announce their digital assets by the conclusion of the following month, local media reported.
In South Korea, the passage of a bill involves initial drafting by eligible parties, scrutiny by relevant committees including the Legislation and Judiciary Committee, followed by debate and voting in a plenary session.
The approved bill then proceeds to the President for assent and, if not vetoed, it becomes law after public promulgation. The bill is currently under review by the legislative committee for any possible conflicts with existing laws, where it will then be debated in a plenary session.
In the US, the 2012 STOCK Act mandates Congress members to disclose financial holdings, but it does not explicitly cover crypto. An advisory memo in 2018, however, suggested they report crypto assets similarly.
In the UK, MPs must disclose financial interests, including shares, under the Register of Members’ Financial Interests, although, like the US, there’s no specific guidance on crypto.
Lessons learned from South Korean crypto scandal
South Korea’s own legislative push follows directly from a reported scandal involving Democratic Party lawmaker Kim Nam-kuk and his millions in undisclosed crypto holdings.
Reports claimed Kim owned tokens from game company Wemade in 2021, worth some $4.5 million at the time. That led his own party to conduct an investigation into his conduct before he finally decided to call it quits.
Kim may have liquidated all his crypto holdings before the implementation of South Korea’s travel rule in March 2022. The rule requires all crypto exchanges within the country to report transactions in excess of 1 million won (roughly $757) and to identify entities behind them.
While the controversy has centered on the fact that Kim reportedly emptied his digital wallets just before the rule took effect, he’s also come under fire for a separate but related matter.
Kim’s co-sponsorship of a bill in July 2021, advocating for postponed taxation on digital assets, has raised eyebrows as it occurred about half a year before he liquidated his Wemade tokens.
The lawmaker has publicly refuted those allegations and said he would take legal action against media companies for false reporting.
In a Facebook post earlier this month, Kim apologized to his party members, stating he would “fight unfair political attacks to the end and uncover the truth” as an independent member of Congress.
“Over the past week, media reports based on false facts have been pouring out,” Kim said, according to a rough translation of the post. “I’m leaving our Democratic Party for a while, but I will always support and be with the Democratic Party.”
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