The number of cryptocurrency businesses and exchanges is expanding in South Korea. But firms that own cryptocurrency have no options under the present accounting framework. The Financial Supervisory Service (FSS), a watchdog, reportedly stated that it has developed “a plan” to “enable virtual currency accounting.” The FSS said that the proposal was drafted after consultations with the Korea Accounting Standards Service and the Korea Institute of Certified Public Accountants (KICPA),
According to the parties, the new regulations will increase transparency and “reduce obstacles for corporations and auditors” dealing with cryptocurrencies.
In response to the collapse of Terra ecosystem coins in May and the subsequent fall of the second largest exchange FTX, regulators are the world and auditors are bent on increasing transparency standards for the crypto market.
With “clauses” added for crypto firms, the FSS will attempt to amend current accounting laws. The FSS will also provide research studies and a list of best practice guidelines for firms that must declare their crypto holdings. The Financial Services Commission (FSS) said that it will soon “confirm” its policies regarding crypto accounting.
Businesses will be obliged to disclose token sales and cryptocurrency issuances when these new regulations are implemented. When companies publish required financial documents, they must also report the tokens they currently possess.
The KICPA and the FSS will be drafting their own set of recommendations for crypto auditing. The FSS did not provide a timeline for implementation but stated that it was interested in hearing “opinions” on its approach.