South Korea’s financial regulator has revealed that it wants to introduce auditing guidelines for crypto-related firms – in response to the Terra-LUNC “incident” and the fall of FTX.
Crypto exchanges and a range of crypto firms are growing in South Korea. But the current system of accounting does not provide options for companies with crypto holdings. Per Asia Kyungjae, the regulatory Financial Supervisory Service (FSS) said it had created “a plan” to “support virtual currency accounting.” The FSS said it had drafted its initiative following talks with the Korea Accounting Standards Service and the Korea Institute of Certified Public Accountants (KICPA).
The parties claimed that the proposed new measures would help boost transparency and “reduce difficulties for companies and auditors” working with crypto.
The new guidelines will force firms to make disclosures on crypto issuances and token sales. They will also be obliged to disclose the tokens they are holding when they issue mandatory financial statements.
The FSS explained that it would also seek to make changes to existing accounting legislation – with “clauses” inserted for crypto companies. The FSS also stated that it would distribute a list of best practice protocols and case studies for companies that need to make crypto disclosures.
Crypto Auditing Guidelines: Why Are they Needed in South Korea?
The FSS was quoted as explaining that it would “confirm” its guidelines for crypto accounting following discussions with another top regulator, the Financial Services Commission.
But the body will also listen to “external opinions” with “joint seminars” on crypto accounting in the pipelines – with industry players and auditing professionals set to attend.
The FSS said it was looking forward to hearing “opinions” on its proposal but did not put a timeframe on rollout.
The KICPA also stated that it would be preparing its own set of proposals for crypto auditing.
Regulators and auditors are reportedly keen on raising transparency levels in the crypto sector in response to the collapse of Terra ecosystem coins in May – and the subsequent fall of the American exchange giant FTX.