According to a Public Ethics Committee, one in five South Korean public officials, 411 out of 2,047 officials, holds cryptocurrency, totalling around 14.41 billion Korean won ($9.8 million). This reveals the extent to which cryptocurrency, particularly altcoins, is penetrating Korea’s public sector.
Kim Hye-young, Seoul City councilor, has a portfolio of 1.7 billion won ($1.2 million) spread across 16 types of cryptocurrencies, including Bitcoin, Ethereum, Dogecoin, and Ripple’s XRP. The majority of her holdings are owned by her family members, with her husband owning 472 Dogecoin and 519,004 XRP, while her son owns 3,336 XRP. They also own Bitcoin and Ethereum, but in small amounts. This is an example of the most invested family in the Korean public sector, with family members included in the crypto count.
Choi Min-gyu, Seoul City Councilor, the second biggest holder, has 1.62 billion won ($1 million) in crypto, including 409,551 XRP, 9,402 Arbitrum, and 4,701 Cardano.
Kim Ki-hwan, CEO of Busan-Ulsan Expressway, the third largest holder, stands out with his preference for lesser-known altcoins. His holdings total 1.42 billion won ($969,000), including 152,251 Luna Classic, 5,979 Challenge docs, 1,989 Horus Pays, and 2,989 EOS Blacks.
In January 2024, the new legislation was enacted, requiring all public officials to declare their crypto holdings, having been decided in May 2023 when the South Korean National Assembly passed the bill. The legislation resulted from a growing concern that public officials could hide large amounts of personal wealth, owned individually or by close family members, and that this wealth could be used to corrupt local governments. For this reason, public officials with a high ranking in government, designated with the category Grade 1, would have to declare their crypto portfolios, transaction records, and location where they initially bought their crypto.
Altcoins are featured heavily in South Korean portfolios, with Ripple’s XRP often appearing, a crypto project focusing on remittances and institutional investors. Despite being major tokens, there was a noticeable absence of Bitcoin and Ethereum, which were not featured prominently. South Korea is renowned for its strict regulations on crypto trading. Despite such an environment, traders are still finding a way to build up their portfolios. The requirements for public officials to declare their holdings is just another example of strict regulations in South Korea. Conversely, the Lazarus group, backed by North Korea, conducted what has been described as the biggest exchange hack in crypto history.
South Korea has recently cut down on unregistered overseas crypto exchanges operating in the country. The FIU has approached Google to ask for 17 such exchanges to be limited in advertising to Korean consumers. Further, in March, FIU pursued crypto operators who were not reporting their activities according to South Korean laws. The South Korean government seems to be cracking down on disorderly conduct within the crypto industry and is attempting to regulate the entire market with stricter rules. Given the crypto activities of North Korea, South Korea may be compensating for the lack of law and order with excessive crypto regulations.
