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A range of crypto exchanges and crypto firms are on the rise in South Korea. But the current system of accounting does not provide the option for companies with crypto holdings. To Asia Kyungjae, regulator the Financial Supervisory Service (FSS) said it had drawn up “a plan” to “support virtual currency accounting.” The FSS said it had drafted its initiative after 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 promote transparency and “reduce difficulties for companies and auditors” dealing with crypto.
The new guidelines will force firms to make disclosures on crypto issuance and token sales. They will also be bound to disclose the tokens held by them while issuing mandatory financial statements.
The FSS clarified that it would also like to make changes to the existing accounting law with a “clause” inserted for crypto companies. The FSS also said it would distribute a list of best practice protocols and case studies for companies required 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 hear “outside opinion” with a “joint seminar” on crypto accounting in the pipelines – in which industry players and auditing professionals are set to participate.
The FSS said it was eager to hear “feedback” on its proposal but did not put a time frame on the rollout.
KICPA also said that it will create its own set of proposals for crypto auditing.
Regulators and auditors are reportedly keen to increase the level of transparency in the crypto sector in response to the collapse of Terra ecosystem coins in May – and the subsequent collapse of US exchange giant FTX.
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