This week Korea’s Financial Services Commission (FSC) published a draft update to its code of conduct for internal staff requiring them to disclose their cryptocurrency holdings.
The move is in response to a request by the Anti Corruption and Civil Rights Commission which has asked other institutions to take similar steps.
It covers staff with various duties, including drafting policies for virtual assets or people involved in investigations. Additionally staff with virtual asset reporting duties or working on technology for the sector also have to submit a report on their crypto holdings.
The Korean FSC is by no means the first to require similar disclosures. For example, the US Senate implemented the requirement in 2018. The Wall Street Journal did a deep dive on who owned what.
The crypto sector is known for its conflicts of interest and insider dealing. The Coinbase employee convicted of insider dealing may have been one of the first convictions, but it happens reasonably regularly. Occasionally Ledger Insights has highlighted suspect price movements around corporate announcements.
Corporate ethics standards for crypto holdings
From an ethics perspective, these policies should also apply to corporates. If someone made a decision to partner with a crypto firm, does the corporate decision maker hold the project’s token?
If a company decides to work exclusively with a single blockchain technology, did the person who made that decision own the related token? If a corporate plans to make an announcement that will materially influence a token price, what steps do they take to ensure that insiders don’t profit and do they monitor the token’s price around the announcement?
The real question is: do enough corporates and institutions have ethics standards in this area?
