South Korea: Bans all government officials from holding and trading cryptocurrencies

The South Korean government has reportedly banned all government officials from holding and trading cryptocurrencies. Even if their cryptocurrency activities are unrelated to their jobs, public officials will still be subject to disciplinary action.

South Korea has “issued a ban on holding and trading virtual currencies” to all government officials, according to South Korea’s Maeil Business News.

According to the document titled “Information on Public Servants Holding and Trading Virtual Currency,” the Daily Economic News states:

“The personnel department asked them (civil servants) not to hold and trade virtual currencies, even if it is not related to their work. This is the first time the government has enacted a virtual currency ban for all public officials.”

The Daily Economic News cited the personnel department as explaining that if employees conduct digital currency transactions for personal gain, they are “violating the self-control obligation prohibited by the Civil Service Law,” especially when trading during working hours.

The officials “may be subject to disciplinary action,” the outlet quoted a senior official as explaining:

"The disciplinary issue cannot be dealt with simply by reducing the number of cases, but needs to be interpreted by law."

The Korean Financial Services Commission, the Fair Trade Commission and other relevant ministries have warned employees "not to invest in virtual currencies," the Maeil Business News added, adding that Hong Nam, director of the Policy Coordinator's Office, told all public officials to do the same in January.

Last month, the Korean Anti-Corruption & Civil Rights Commission issued a “Guideline for Cryptocurrency Conduct” to all government ministries and public institutions.

The document adds cryptocurrency to Article 12 of the Civil Servants’ Code of Conduct, prohibiting public officials from using “information obtained during the performance of their duties to assist in trading or investing” in cryptocurrencies. In addition, the Financial Supervisory Commission of Korea, as an independent agency, will review its actions.

Earlier this year, the government proposed a bill requiring public officials to declare their cryptocurrency investments following allegations that some government employees took advantage of perceptions of non-public regulation to manipulate the market and engage in insider trading.