How South Korean Government Prevents Officials from Insider Crypto Trading

How South Korean Government Prevents Officials From Crypto Insider Trading

South Korea currently has no law against government officials insider trading with the knowledge of cryptocurrency regulations. The case against an employee of the country’s Financial Supervisory Service (FSS) accused of crypto insider trading has come to a standstill without grounds for punishment. However, the government has worked out a plan to prevent future occurrences.

Also read: Indians Look to Buy Bitcoin Overseas as Regulations Tighten

No Applicable Law Currently

The issue of insider trading using the knowledge of the government’s cryptocurrency regulations became prominent last month when an FSS employee was accused of crypto insider trading. The FSS has an active role in creating crypto regulations as well as inspecting banks for crypto-related money laundering measures.

How South Korean Government Prevents Officials From Crypto Insider TradingThe employee invested about 13 million won on July 3 of last year and sold more than half of his holdings on December 11, Chosun described. Then, on December 13, the government announced a set of strict regulations, including a ban on crypto trading for minors and foreigners.

Guilty or not, there is no law to punish government officials for insider trading of cryptocurrencies. While employees are prohibited from stock trading using insider knowledge, a senior FSS official was quoted by Edaily explaining:

Currently, there are no provisions in the regulation on virtual currency.

New Code of Conduct Could Help

How South Korean Government Prevents Officials From Crypto Insider TradingThe rules applicable to stocks do not apply to cryptocurrencies since they are currently not recognized as financial assets in Korea. To prevent future insider trading, Korean prime minister Lee Nak-yeon ordered the creation of a new Code of Conduct to address crypto trading by public officials.

The Korean Anti-Corruption & Civil Rights Commission issued the “Code of Conduct Guide to Cryptocurrency” to the government and public agencies last week. It adds cryptocurrency to Article 12 of the Civil Servant Code of Conduct which, according to Tokenpost, states that:

Public officials shall not use the information learned during their duties to assist in trading or investing in property related to securities, real estate, etc., or providing such information to others to help them trade or invest.

However, the FSS Did Not Get the Memo

How South Korean Government Prevents Officials From Crypto Insider TradingThe FSS, however, is not bound by the new Code of Conduct. According to Edaily, the document was not even sent to the FSS. “This guidance document was sent to the central administrative agency, metropolitan area, basic local autonomous body, city and provincial office of education,” an FSS official detailed. A senior official of the FSS Inspectorate confirmed to the publication, “We did not receive any letters of interest.”

The news outlet explained that this is due to the FSS being under the supervision of the Financial Services Commission (FSC) and the Securities and Futures Commission under the current law.

The Financial Services Administration Innovation Committee explained that “redefining the FSS as a public institution weakens the independence and accountability of supervisory institutions, making it more vulnerable to external pressures such as political parties,” Maekyung reported. Edaily continued:

As the FSS is not a government agency, FSS staff are not covered by the Code of Conduct.

Following media reports, the Korean government issued a statement clarifying that the FSC will inform the FSS of applicable notices “such as the prohibition of virtual currency transactions related to jobs.” An FSS official was quoted by News1 saying, “we will revise our own Code of Conduct through internal consultations,” adding that FSS staff will not be able to use internal information to trade or invest in cryptocurrency.

What do you think of the Korean government’s plan to prevent crypto insider trading? Let us know in the comments section below.

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Price is below 21 MA
Broke horizontal support at 107.825
Currently re-testing the support turn resistance line

Broke downtrend channel support line.
Reject prices the second time at 107.825 horizontal resistance line
Bearish engulfing candle stick.

Position: Short
Entry: 107.5
Stop Loss: 108.5
Target: 105.5
Risk:Reward = 1:2

Gold: longer-term prospects remain bullish

Gold: longer-term prospects remain bullish


Gold             prices are retreating since last Friday, with yesterday’s losses were the largest since June 2017. Today, the metal is trying to slow down the downside move witnessed on the back of a widespread recovery in the greenback. In the short-term, gold             may remain under some bearish pressure, while the longer term prospects remain positive.
The USD demand is rather a local technical correction after an aggressive sell-off seen last week, then a sign of an underlying demand coming back. The dollar’s fundamentals still point to the downside, as the U.S. faces the so-called double deficit, as well as the threat of narrowing the interest rate differential with other global central banks embarking on monetary policy tightening.
Therefore, the current bearish correction in gold             prices could reverse as soon as the dollar bears return to the market and send the USD index to three-year lows. The immediate resistance lies at $1,331; a break above will open the way to the next target at $1,339. The key level to the downside remains at $1,300, while the short-term support is expected in the $1,322 area.

BTCUSD – weakening structure on 1H time frame

BTCUSD – weakening structure on 1H time frame

Bitcoin / Dollar BITSTAMP:BTCUSD

As labelled on the chart, there appears to be a weakening of the structure of a bullish rebellion that has occurred over the last few days. I expect further oscillation and more weakening based on the current evidence. Price could well return to the 12000 mark with a weak structure. Personally I’m short with a reasonably wide stop-loss. This is not a recommendation.

USDCAD – Daily. Area of interest

USDCAD – Daily. Area of interest

Reasons to look at potentially going short;
– Third touch of descending trendline
– 61.8 fib retracement
– Back testing Short term support now possible resistance
– Heading towards dynamic resistance (200MA)

Things to consider before;
– A lot of buying pressure over the last few days (2 of 3 Strong Bullish Candle closures)
DXY             looking bullish , Could see some more dollar strength before anything
– Scale down to lower timeframes and look for a break of the ascending trendline before taking shorts

Longterm if we get the signal to go short and it all plays out then 124.200 could be a good target.

BTC not done just yet. currently riding up on fibs

BTC not done just yet. currently riding up on fibs

Bitcoin / Dollar BITFINEX:BTCUSD

There has been a lot of argument around whether BTC             is currently on a larger downtrend and in a B wave, or beginning a new cycle in wave 1.

Either way BTC             has been riding the .75 fan fib support line for some time in an ascending triangle .

This looks to continue for some time yet, but keep an eye out for fib support breaks and the beginning of retrace of corrective wave.