YEREVAN (CoinChapter.com) — The Democratic Party of South Korea has mandated all prospective parliamentary candidates to disclose their cryptocurrency holdings before the 2024 general elections. This decision, affecting the party that controls 167 of the 300 seats in the National Assembly, signifies a shift towards “transparency and ethical standards” in the digital assets sector.
Reasons behind disclosure regulations
The rationale for the new requirement stems from a recent incident involving a Democratic Party member, Kim Nam-kuk. In late August 2023, Kim faced scrutiny for holding over $4.5 million in Wemix tokens, developed by South Korean blockchain game developer Wemade.
According to a local outlet, News 1, his involvement raised serious concerns over potential conflicts of interest, misuse of insider information, and money laundering. This incident accelerated legal initiatives requiring officials to report their cryptocurrency holdings and highlighted the necessity for more stringent regulatory measures.
This policy is part of a broader effort by the South Korean government to tighten cryptocurrency regulations. South Korea has been known for its stringent regulatory framework, balancing the potential of blockchain technology and digital assets with the need for investor protection and financial stability.
Meanwhile, the cryptocurrency trading revenues in the country grew to $656 million, according to August statistics, compared to $395 million in 2022.
The real-name system sets South Korea aside.
The real-name trading system is central to this regulatory approach, which prohibits anonymous trading of digital assets. South Korea requires crypto exchanges to have banking partnerships, ensuring that accounts are linked to verified identities. This system aims to prevent money laundering and ensure transaction transparency.
The Financial Services Commission (FSC), a South Korea crypto regulations body, has set guidelines for crypto exchanges, including standards for listing cryptocurrencies and measures to enhance investor protection. Additionally, the country has banned Initial Coin Offerings (ICOs) due to fraud and speculative investment concerns.
However, the crypto scene in the country has expanded in 2023. As previously reported, Bithumb Exchange plans to launch an initial public offering (IPO) in 2025. Additionally, several major South Korean securities firms plan to launch their crypto exchanges in 2023. One of these is Mirae Asset Securities, planning to launch in Bitcoin, Ethereum-based products.
Banks like Nonghyup and Kookmin are also dipping their toes in the crypto pool, with President Yoon Suk Yeol playing the role of the lifeguard, promising to ease regulations.
South Korea crypto regulations could change with 2024 election
Taxation of cryptocurrency profits is another area where the government has been planning to implement changes, integrating digital asset gains into the existing tax system. Moreover, the officials will enforce strict anti-money laundering policies in the sector, requiring exchanges to report transactions and maintain detailed user records.
Under President Suk-Yeol’s administration, there has been a shift towards a more pro-business approach, with expectations of South Korean crypto regulations easing and supporting the growth of the blockchain and cryptocurrency industry. However, the 2024 elections could nip those plans in the bud.
South Korea’s opposition Democratic Party of Korea has won a district by-election seen as a warm-up for the 2024 general election, in a setback for President Yoon Suk Yeol. The April 2024 election’s outcome will heavily influence the second half of Yoon’s presidency and, by extension, the innovative finance market in the country.
