South Korea Issues New Crypto Accounting Rules

Lavina Daryanani
Source: Business Insider India

The global crypto regulatory landscape has seen several amendments unfurl over the past few months. A host of nations have been tweaking their rules with the intention of protecting investors. Well, South Korea seems to be the latest one to jump onto the bandwagon.

The South-East nation’s financial regulator, the Financial Services Commission [FSC], issued new draft rules pertaining to the accounting of cryptos and other digital assets recently. According to the draft, companies that issue or own crypto assets will have to provide in-depth disclosures in their financial statements from next year. This means internal information regarding their business models and internal accounting practices with respect to crypto sales and profits will have to be provided.

Furthermore, they will also have to reveal details with respect to the number and characteristics of their crypto tokens. Firms that hold crypto assets for investment purposes have to disclose information pertaining to their book value, market value, volume, and classification.

Crypto interest in South Korea has seen a sudden spike of late. A few days back, investors were seen paying a 1.5-year high premium rate while buying Bitcoin. Thus, with investors flocking into the market and bumping up the buying pressure, companies are set to benefit from the same. Thus, the new rules amid such an environment will gradually help in checking the accountability box.

Source: CryptoQuant

Also Read: Crypto is Unsuitable as Money, BIS Informs G20 Nations

New crypto rules to come into effect in January 2024

As per the new guidelines, companies will also have to recognize sales as profit. However, they have to do so after completing all obligations to the crypto holder. That included the allocation of perks, rewards, etc. The statement released revealed that the draft guidelines were reviewed and green-lit by the Accounting Standards Board on July 7. They are set to come into effect from January next year.

Regulators have asserted that the new rules will help bolster the transparency of the crypto market and protect investors. Alongside, it will encourage the growth of the South Korean crypto industry. 

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