- The FSC decreed that the crypto firms must disclose their operations from 2024 financial statements.
- The companies and auditors are hashing out some details with the regulations regarding the classification of profits.
South Korea has decided that it can’t allow its crypto firms to keep their transaction concealed. The regulatory body Financial Services Commission (FSC), made the announcement recently. According to the formal statement, the rule will be effective the in the financial statements made in 2024.
South Korea Bill with Directions and Confusion
From the following year, crypto firms must disclose every single piece of information about their business operations. It would include the market value of crypto, volume, profit and loss margins, accounting policies, business models, etc.
FSC’s official spokesperson said it’s bringing this rule to increase transparency in crypto dealings. On June 30, 2023, the regulatory passed the Virtual Asset User Protection bill. Besides the disclosure, the companies will also have to adhere to some audit guidelines being prepared right now.
Companies and their auditors noted a few oddities about the legislation. They said the bill recognized the costs of developing virtual assets and their platform as intangible assets. On the other hand, the proceeds from the sale of virtual assets will be remembered as profits.
The accounting experts of the country have been discussing the minute details of the bill with the regulators. However, they haven’t reached any conclusion so far. So it would be interesting to see the inclusions and exclusions in one year. South Korea is not the only one working on crypto regulations; the rest of the world is doing it too.
Crypto Regulations Happening Across the Globe
United States
The Republican chairs of two House of Representative committees are working on the bill. In all likelihood, the draft would be tabled in 2024. However, it is still being determined if the bill will muster the support of other houses. In the US, the recent occurrences paint a tentative picture of crypto adaption.
On the one hand, the SEC is clamping down on major exchanges like Binance and Coinbase. On the other, the finance giant filed an ETF for Bitcoin. The tussle between the regulatory and crypto firms has been going on for quite some time now. Crypto users hope the country will soon open its markets and economy to digital assets.
Europe
The European Union took a proactive step towards embracing digital assets. The European Parliament paved the way for the Markets in Crypto Assets (MiCA) regulations. With this ruling, crypto firms will come under legal purview. The legislation includes cryptocurrencies like Bitcoin and Ethereum along with Stablecoins.
MiCA will exclude NFTs, CBDC, and assets that would function as transferable securities.
China
When Bitcoin emerged as a valuable crypto, China was the leader in its mining. But very soon, the country banned all digital assets and mining. Recently, it started developing its Central Bank Digital Currency (CBDC), called digital yuan. It is currently in the testing phase.
Other countries like Japan, Singapore, Brazil, Australia, the United Kingdom, India, and Canada are taking small steps toward crypto adoption. Some are focusing on CBDC, and others are promoting blockchain-based projects. The future looks promising for crypto adaption across the globe.
Conclusion
In conclusion, the South Korean regulatory body, Financial Services Commission (FSC), has taken a significant step toward increasing transparency in the crypto industry by mandating the disclosure of crypto holdings and operations in financial statements from 2024. This move aims to provide investors and the public comprehensive information about crypto firms’ business operations, including market value, volume, profit and loss margins, accounting policies, and business models. South Korea is not alone in its efforts to regulate the cryptocurrency space. Countries around the world are taking various approaches to crypto adoption and regulation.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in cryptocurrencies and NFTs comes with a risk of financial loss.
