South Korean government officials have reportedly been caught insider trading. They sold all of their cryptocurrency holdings and profited just before the regulators announced crypto regulatory measures. The country’s Financial Supervisory Service is investigating the case.
A Case of Government Insider Trading
At a meeting of the National Assembly’s Committee on Thursday, January 18, the Financial Supervisory Service (FSS) confirmed that some employees invested in cryptocurrencies and sold them just before the government announced crypto regulatory measures, local media reported.
A right-wing party lawmaker said at the meeting, as reported by Joongang Ilbo:
There is intelligence that FSS staff sold all of the virtual currency that they invested in just prior to the announcement of the 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 a tremendous thing for civil servants to influence the market and gain profits.
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’.” […]