In South Korea, an increasing number of public officials are moving into the cryptocurrency industry, raising ethical questions. This view was voiced by Ro Wun-rae, a member of the National Assembly, in a commentary for The Korea Herald.
According to the lawmaker, a recently dismissed Class 5 official from the Financial Services Commission (FSC) left to take a job at Bithumb — one of the country’s largest cryptocurrency exchanges.
Civil servants in South Korea are ranked by seniority up to the top Class 1. Under the law, only officials of rank 4 and above are prohibited from moving to private companies related to their former duties for three years after leaving office.
However, the Bithumb case, the congressman says, is “extremely inappropriate,” since the public servant hails from a department that directly regulates cryptocurrencies.
Ro Wun-rae also said that a senior official from the Fair Trade Commission (the country’s antitrust body) took a job at another major exchange — Upbit. In the civil service he was responsible for the fintech sector.
The Ethics Committee found no problem with the transition, the congressman stressed, though the officer dealt with issues closely related to virtual assets. According to Wun-rae, the agency did not disclose the transcript of the hearing on this case.
He added that the movement of personnel is not limited to financial regulators. According to him, the officer who headed the group dealing with cryptocurrency-related crimes is set to move to Upbit.
In the lawmaker’s view, public institutions in such cases shield former employees.
“Hiring former and current staff from the FSC and the police who enforce regulatory rules is highly unethical, as they are more likely to serve as a shield than as experts,” the congressman said.
He says it is necessary to broaden the vetting of hiring to former Class 7 officials and to publish records of reviews of these cases.
As reported, former head of the U.S. Commodity Futures Trading Commission Christopher Giancarlo, after stepping down, became a member of the board of the crypto-lending platform BlockFi. He left the post after four months, but continued to work with the company as an adviser.
The former head of the Office of the Comptroller of the Currency within the Treasury Department first joined the board of the startup Spring Labs, then led Binance US, and next became CEO of the Bitfury Group mining company.
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