South Korea regulator warns employees to file digital currency returns

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The South Korean financial regulator has said its employees who deal with digital currencies must file reports on their personal digital currency holdings, described by a spokesperson for the agency as a “reminder of the existing code of conduct.”

According to local press reports, the requirement will extend to employees of the Korean Financial Services Commission (FSC) working to develop the country’s response to digital currency regulation, as well as those overseeing developments in the technology, and those tasked with monitoring digital currency transactions and exchanges.

Affected staff members have been given until May 7 to file their returns, or face disciplinary action for breaching the code of conduct.

As per the Capital Markets Act, FSC staff are permitted to use only a single exchange account, and to engage in up to 20 stock trades within a three-month window. More senior staff are banned from trading securities outright, but can invest in exchange traded funds (ETFs) and international securities.

For digital currency, no such rules are as yet in place. However, internal agency rules require employees to report any investments to the chairman of the FSC. They are also expected to avoid trading if they have received insider information, though at present, the penalties in place for breaches are comparatively lenient.

The developments follow a furor over an employee trading digital currency back in December 2017, where the individual made significant profits trading digital currency on information the regulator had yet to make public.

The employee involved had been engaged in work around digital currency regulation, and saw returns of over 50% trading the news, ahead of an official announcement from the regulator.

The regulator is hoping the reminder of the obligations on its staff will prevent repeat incidents, which have been seen as potentially undermining trust in the regulator and transparency in South Korea’s digital currency markets.

See also: CoinGeek Live panel, Digital Currency & Global Compliance: Tools & Tips for Exchanges, Wallets & Other Service Providers