Korean Regulator Investigating Staff Insider Trading of Cryptocurrencies

An official from South Korea’s Financial Supervisory Service (FSS) has reportedly said that an investigation is underway into claimed insider trading within his organization.

Choi Heung-sik, governor of the FSS, said the regulator – an executive arm of the Financial Services Commission – will make public any findings on the allegations of illegal trading of cryptocurrency by one of its staff members.

According to the Korea Times, Choi said:

“We’ve acknowledged allegations that an FSS official sold crypto-assets based on insider information before the government’s updated announcement to regulate the market. We are looking into this case.”

The news source also cited Hong Nam-ki, minister of the office for government policy coordination, as saying that policies on trading digital currencies vary between government offices, and it will take time to develop a unified policy on the matter.

Yonhap news agency also indicates that multiple staff may have been involved in insider trading.

The alleged insider trading is said to have occurred prior to Korean regulators announcing new rules on cryptocurrency trading in the country – a move that has been, at least in part, linked to the recent slump in prices across the crypto markets.

With the restrictions, banks have faced closer scrutiny over their relationships with cryptocurrency exchanges, and holders of anonymous virtual accounts must now attach their identity or face fines. A possible ban of cryptocurrency exchange trading is still being considered, according to officials, and a decision is expected to be made during Thursday’s parliamentary session, Reuters says.

Korean National Assembly building image via Shutterstock