The South Korean Financial Supervisory Service (FSS) is investigating a case of insider trading related to cryptocurrencies, according to latest reports.

Bitcoin.com reported that some government officials reportedly sold their cryptocurrency holdings just before the authorities announced their clampdown in this sector, thereby securing huge profits.

Joongang Ilbo quoted a right-wing party lawmaker saying, “There is intelligence that the FSS employees sold all of the virtual money they had invested just before the announcement of the government's measures.”

FSS Governor Choi Heung-sik and Chief of the Office of the Prime Minister, Hong Nam-ki have confirmed the news.

“We have confirmed that some public officials have done such an act,” Hong Nam-ki said.

While the lawmakers are calling for “thorough investigation and punishment,” an FSS official said that physical punishment seems difficult at the moment due to the lack of ethics and code of conduct for virtual currency investment in the FSS regulations, Chosun reported.

According to the Korea Herald, the official who reportedly sold his cryptocurrency holdings was an FSS employee dispatched to the Policy Coordination Office to work on the measures aimed at curbing the speculation in cryptocurrencies. The official reportedly purchased cryptocurrencies worth 13 million won ($12,220) on July 3, 2017 and sold them on December 11, 2017 for around 20 million won, securing nearly 7 million won as profit.

“It is a fact that the department that (the official) works for was involved in preparing the announcement materials,” a government source was quoted by the Korea Herald.