22 Jan Cryptocurrency scandal South Korean regulators probe claims of insider trading
As speculation about South Korea’s stance on cryptocurrency shifts markets, it has emerged that at least one government official in the region is under investigation for insider trading.
“We’ve acknowledged allegations that a Financial Supervisory Service [FSS] official sold crypto-assets based on insider information,” said Choi Heung-sik, governor of the country’s regulatory body, on Thursday (18 January), according to media outlet KoreaTimes.
Choi said the incident occurred “before the governments updated announcement to regulate the market”. He added: “We are looking into this case.”
While details remain scant at the time of writing, a number of publications dedicated to cryptocurrency – including CoinDesk and CoinTelegraph – revealed that more than one person could be involved.
“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,” a Korean official told Chosun, a local outlet.
Uncertainty surrounding an alleged plan to ban crypto-exchanges was partly to blame for a recent crash in the value of digital currencies, including bitcoin and ethereum. But whatever the next move may be, some form of regulation appears imminent.
South Korea’s Financial Services Commission (FSC) is still pondering the idea, but according to KoreaTimes opinions vary “even within government offices”.
Reporting on a separate press conference, KoreaTimes cited the Bank of Korea governor, Lee Ju-yeol, saying that cryptocurrencies remain volatile and unpredictable.
The top banker said: “It’s understandable the government is pushing ahead with its plans to further regulate the cryptocurrency market, as the prices of cryptocurrencies are showing sudden ups and downs. The trend is not good from the perspective of investors.”
As the popularity of digital currency – specifically bitcoin – spiked in the last few months of 2017, investors around the world cashed in on the craze. Now, numerous countries – including China, Russia and the UK – appear to be pushing back in the form of heightened legislation.
Some critics, economists and banking chiefs fear the unstable pricing and links to cybercrime. Allegations of insider trading were recently levelled at popular exchange CoinBase.
Still, despite a recent tumble this week which saw bitcoin fall below $10,000 for the first time in months, prices have since started to rise. It won’t take much, however, for that to change.