South Korean authorities officers have reportedly been caught insider buying and selling. They bought all of their cryptocurrency holdings and profited simply earlier than the regulators introduced crypto regulatory measures. The nation’s Financial Supervisory Service is investigating the case.
A Case of Government Insider Trading
At a gathering of the National Assembly’s Committee on Thursday, January 18, the Financial Supervisory Service (FSS) confirmed that some workers invested in cryptocurrencies and bought them simply earlier than the federal government introduced crypto regulatory measures, native media reported.
A right-wing celebration lawmaker stated on the assembly, as reported by Joongang Ilbo:
There is intelligence that FSS employees bought all of the digital currency that they invested in simply previous to the announcement of the federal government’s measures.
“We have confirmed the intelligence,” FSS Governor Choi Heung-sik admitted. “We have confirmed that some public officials have done such an act,” Chief of the Office of the Prime Minister, Hong Nam-ki, added. The news outlet noted that the lawmakers called for “thorough investigation and punishment,” and quoted them emphasizing:
It is an incredible factor for civil servants to affect the market and acquire earnings.
Chosun elaborated, “It is expected that the moral hazard controversy will spread if the government uses the inside information and profits from virtual currency transactions while the financial authorities publish a hard-line policy saying that ‘the cryptocurrency transaction is gambling’.”
FSS Crypto Policies
The Korean Public Service Ethics Act “strictly restricts the stock trading of public officials in order to prevent misuse of internal information,” Chosun identified. However, since cryptocurrency is at the moment not outlined as a monetary asset or currency, “there is no such thing as a code of ethics and no code of conduct for digital cash funding within the FSS rules.” However, “the misuse of internal information could lead to punishment,” the publication added.
Recently, the FSS suggested its workers to chorus from buying and selling cryptocurrencies, stating that “If the supervisory officers interact in speculative transactions, it is going to be tough for the general public to grasp ethically,” Chosun also reported.
On Tuesday, the FSS introduced that it has created a Virtual Currency Task Force which has two divisions: a “virtual currency counterpart” and a “virtual currency checkpoint,” Asia Today defined. The former is devoted to cryptocurrency-related duties whereas the latter is a session physique of crypto-related inspections and supervisions.
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