National Assembly should complete crypto survey or voluntary reporting

The National Assembly's National Policy Committee adopted a resolution for all lawmakers on Thursday to voluntarily disclose crypto assets. The idea here is to ensure that the legislators of the 21st National Assembly report to the Ministry of Personnel Management about any possession of cryptocurrencies or changes to the details of their assets since the beginning of their term so that the Anti-Corruption & Civil Rights Commission can look into the records accordingly. It is a measure taken by the National Assembly to quell public suspicion about lawmakers’ ties with cryptocurrency investments following Democratic Party (DP) lawmaker Kim Nam-kuk's crypto scandal.

As public officials' current property registration system excludes crypto assets, it is impossible to find out if lawmakers own any cryptocurrencies based on the records already released. Although some political leaders have voluntarily acknowledged their possession of digital currencies, no survey has yet been done to provide visibility into the whole picture. If assets excluding crypto are subject to reporting as currently required, it is hard to assess lawmakers’ assets accurately. This automatically leads to the suspicion that crypto can be used to conceal property or gather illegal political funds.

Whether lawmakers own crypto matters because they can find themselves in a conflict of interest when dealing with relevant bills. For example, P2E or play-to-earn games - where game money can be turned into crypto for monetization - have been banned across the nation due to their speculative nature since the “Sea Story” scandal broke out in 2004. Korea Game Society has argued that it could have been highly likely that lobbying activities were carried out behind the scenes to legalize P2E games. Lawmaker Kim at the center of the crypto scandal, who owned a large amount of Wemix issued by a gaming company, was among those who proposed a bill in favor of the legalization of P2E games. If any gaming lobbyists were actually involved, it is not outside the realm of possibility that P2E companies could have given out airdropped coins to other legislators as well.

The first thing to do is to thoroughly review all the National Assembly members’ possession of cryptocurrencies. There is only so much we can do to remove doubt solely with a declaratory statement calling for a complete inspection of cyber coins or voluntary reporting. It takes more than legally non-binding resolutions to make things right. Even with lawmakers’ consent for collecting their personal information, the Anti-Corruption & Civil Rights Commission will find it hard to press ahead with verification procedures because it has no right of compulsory investigation. Given these limitations, there is a need to require virtual asset exchanges to submit documentation as they have full access to the details of their users’ crypto and transactional details. Practical measures should be taken immediately on the National Assembly's part to disclose every single detail of lawmakers’ cyber coins and investigate any suspicious trade activities if needed.