The past week of confusion and friction over cryptocurrency regulation in South Korea continues to unfold as accusations surface of government officials practicing insider trading, local news source Chosun reports.
According to the local reports on Thursday, Jan. 18, some government officials from the Financial Supervisory Service (FSS), who were aware of forthcoming announcements about either a full ban or significant restrictions on trading, bought and sold cryptocurrency just before that information went public.
FSS chief Choi Hyung-sik confirmed the suspicions in a meeting Thursday, admitting:
“We have confirmed the intelligence. We have confirmed that some public officials have done such an act”
The allegations of activity tantamount to corruption further weakens Seoul’s position after its highly-unpopular and contradictory announcements on cryptocurrency regulation caused mass public outcry.
A public petition calling for a reversal of the restrictions as well as the firing of some high-profile ministers has now attracted more than 200,000 signatures, meaning it requires a government response within 30 days.
Meanwhile, the legality of any insider crypto trading based on classified knowledge is not clear at the moment. Ironically, cryptocurrency’s undefined legal status means the practice cannot be treated as trading involving fully-regulated instruments.
A FSS official stated:
“There is no code of ethics and no code of conduct for virtual currency investment in FSS regulations, so it’s difficult to say about punishment at this stage.”
Chosun also points out that the officials could be accused not of insider trading, but more generally of “the misuse of internal information.”