South Korean public officials are choosing to work in cryptocurrency. Local media reported that some come from financial institutions, raising ethical questions.
Major Korean Exchanges hire former financial officials
Roh Woong-rae from the Democratic Party, a member of Korea’s parliament, said that a rising number of Seoul government officials have left their positions and are moving into the crypto sector. He called on Sunday for stricter employment rules after they leave public service.
Quoted by the Korea Herald, the lawmaker revealed that a Grade 5 employee at the country’s main financial regulator, the Financial Services Commission (FSC), has recently quit his position to join Bithumb, which is one of the leading digital asset exchanges in South Korea.
Roh said that the regulations do not currently restrict this type of employment. At the same time, he believes that it’s quite inappropriate for a former FSC official to directly join a crypto company overseen by the regulatory agency he has been working for.
The grade of government officials in Korea is determined by their level of seniority. Grade 1 is the highest. Only grade 4 and above officials of the FSC (a major regulator) and the Financial Supervisory Service, FSS (another major regulator), are required to go through employment screening in order to get a job with a private firm.
According to the Public Service Ethics Act, government employees above Grade 4 are not allowed to occupy a position in the private sector, when it’s relevant to their former work, for three years after the date they leave the state body. Korea’s antitrust watchdog, the Fair Trade Commission, screens the employment status of all officials at Grade 7 level and above, Noh added.
But, the lawmaker attacked the public service ethic committee that conducted the screening of employment applications for not fully reviewing every case. An example was given by a senior FSS officer who had previously been in charge of the fintech sector before he took a job with Upbit, another large South Korean crypto exchange.
Rep. Roh Woongrae stated that no issues had been raised by the ethics committee. But in his view, it’s hard to understand the result of the screening as the official had been involved with matters closely related to digital assets.
The parliamentarian noted that such cases do not only affect financial regulators. A Seoul Metropolitan Police Agency officer, who was part of a group investigating cryptocurrency-related crime, has been revealed by Roh. He is also preparing to join Upbit. “Recruiting former and current personnel from the FSC and the police, which are in charge of regulations, is very unethical, in that they are more likely to serve as a shield than experts,” Roh commented.
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