Financial statements must include crypto: South Korea regulator

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.

Get the day’s top crypto news and insights delivered to your email every evening. Subscribe to Blockworks’ free newsletter now.

Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from Blockworks Research’s Daily Debrief.

Can’t wait? Get our news the fastest way possible. Join us on Telegram and follow us on Google News.