Financial statements must include crypto: South Korea regulator

Companies across South Korea must start disclosing their crypto holdings as part of standard financial statements

July 12, 2023 05:39 am

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Companies across South Korea must publicly disclose their crypto holdings and issuances starting next year.

Financial statements — specifically their commentary sections — should reportedly include the cryptocurrencies they hold or issue, their anticipated monetary value and associated business models.

With this move, South Korea’s Financial Services Commission (FSC) is attempting to bring crypto accounting standards in line with traditional financial reporting.

“With the advent of blockchain-based technologies, transactions using digital assets have flourished and their impact on corporate accounting has also increased,” the FSC said per The Korea Times.

Financial statements have been lacking in accurate details regarding corporate ownership of crypto, the regulator said.

The development forms part of a broader tightening of regulatory measures aimed at digital assets, as a crackdown in the US persists alongside introduction of definitive measures in the EU.

Late last month, South Korea’s parliament passed the Virtual Asset Protection Act to enforce laws against market manipulation and curb insider trading. That law, the FSC reportedly said, led to the further changes to digital asset accounting practices.

South Korea is also mulling changes that would require high-ranking officials and politicians to disclose their crypto holdings following a scandal in May.

The country is often recognized as Asia’s epicenter for crypto activity. It’s estimated the Korean market drives nearly 30% of the total global crypto trading activity.

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