[Column] The Government That Fueled the Coin Crisis Triggered by Kim Nam-guk Must Now Reform the System

"We received a contact from the Ministry of Personnel Innovation instructing us to issue guidelines recommending investigative police officers to limit coin investment and holdings. However, since it only recommended voluntary reporting without any enforcement, implementing it was difficult," said one police officer.

The officer also expressed regret that although the government examined coin investment and potential conflicts of interest among public officials five years ago, it failed to institutionalize any measures.

Confusion has spread throughout the public sector following the 6 billion won coin controversy involving independent lawmaker Kim Nam-guk. There are no guidelines on whether acquisition and holding of virtual assets should be restricted or what sanctions should be imposed if violated.

After the recent incident involving lawmaker Kim, the Anti-Corruption and Civil Rights Commission suggested coming up with new ideas regarding public officials’ coin asset registration. However, several government ministries reportedly expressed opinions that "standards should be established by law."

Government departments have reacted as if the inevitable has happened. The National Police Agency issued coin investment-related guidelines three times in total?twice in 2018 during the coin investment frenzy and once in 2021?and checked investment and holding statuses. Following the inspections, the Police Agency encouraged the sale of assets in 16 cases and excluded one case from the investigative department.

One police officer excluded from the investigative department due to coin investment reportedly responded that asset liquidation was difficult and seemed like a loss, so they would leave the department. The officer explained that although more people might have invested, it was realistically difficult to detect violations without voluntary reporting. An employee from the audit office of an economic ministry also lamented that under current regulations, there is no way to conduct inspections without voluntary reporting.

Under the current Public Officials Ethics Act, virtual assets are not required to be registered or reported as property. As a result, neither the Ministry of Personnel Innovation, which oversees all public officials, nor the Anti-Corruption and Civil Rights Commission, which prevents corruption, has been able to establish a proper supervisory system. There is no section for virtual asset details in public officials’ asset declarations, and the Public Officials Ethics Act under the Ministry of Personnel Innovation does not include any regulations prohibiting public officials from acquiring virtual assets. This has led to moral hazard, with some thinking that if they do not report, it is no problem.

Currently, both ruling and opposition parties have proposed amendments to the Public Officials Ethics Act to the National Assembly’s Administrative Committee. If legal institutionalization is not established even now, it will not only undermine trust in the entire public sector but also hinder the development of the virtual asset industry.

This content was produced with the assistance of AI translation services.