Gov't set to examine approval of former FSS official's move to crypto firm

Financial Supervisory Service (FSS) headquarters located on Yeouido, Seoul / Korea Times file

By Anna J. Park

A high-level official of the Financial Supervisory Service (FSS) quit the state-run financial watchdog recently to move to Upbit, the country's largest cryptocurrency exchange. As it marks the first time for any of the FSS's officials to move to the cryptocurrency sector, the official's move is causing a stir.

According to the FSS Wednesday, the official completed his retirement process at the financial watchdog agency earlier this week and he is officially no longer with the FSS as of Wednesday.

The former FSS official has been known for years for his expertise in worldwide cryptocurrency policies as well as blockchain technologies, and has often been quoted as the government's leading cryptocurrency expert. Market insiders of the coin industry are well aware of his reputation as a top expert in the field.

“While he led the FSS's fintech department, he has been known for his own research and studies into blockchain technologies. So it is understandable if Upbit seeks to hire him,” a market insider told The Korea Times.

Although Dunamu, Upbit's operator, denied to fact-check or confirm the hiring plan, Upbit's plan to hire the former FSS official is accepted as fact by the market, sources involved with the issue reported during a telephone call.

'Relevance' of two jobs needs to be examined

Now the remaining question is whether the former official's change of job would be allowed by the Government Ethics Committee, which gives a final approval or disapproval on retired public officials' next job activities.

According to the Government Ethics Committee, related laws and regulations restrict retired public officials from employment at any institution with relevance to their official duties performed prior to retirement.

“The regulations also state various elements that could be viewed as having relevance between their official duties and their new job position, such as granting authorization and approvals and providing financial subsidies for the field to which a former public official aims to transfer,” an official from the Government Ethics Committee said, adding that the country's law and regulations also stipulate some exceptional articles that could allow the job change despite such relevance.

Any former public official needs to apply to the ethics committee's evaluation 30 days before starting a different job, and it usually takes 30 days to see the final decision. If not satisfied with the final decision, the applicant can file an administrative litigation.

As the committee cannot comment on this specific case, it is still uncertain whether the former FSS official could successfully move to Upbit.

Some market watchers say he could earn the approval, given that the FSS ― along with the government ― has never officially recognized cryptocurrencies, and that there's no direct link between the former official's work and that of the coin exchanges.

Some other watchers say it is not likely that he could gain approval due to the public's potential hostility over the matter.

“This could bring about public antipathy. Given that quite a few minor local coin exchanges are to be closed down in the autumn due to the implementation of the revision of the related law, it is hard to swallow for the public to see a former FSS official moving to a particular coin exchange,” a market insider pointed out.

Whichever way this particular case turns out, it is doubtful to be the last of its kind, as the cryptocurrency market has been showing an exponential growth rate lately, absorbing competent personnel from various sectors.