Restrictions and guidelines regulating the cryptocurrency space are fast becoming all the rage as countries strive to bring cohesion and clarity to this budding industry. Get this: starting January 2024, South Korean firms that handle cryptocurrencies, either by issuance or ownership, will face compulsory disclosure of their transactions to the FSC. These firms will be expected to share comprehensive insight into their crypto transactions under the new set of accounting laws.
But what details would these firms need to reveal? The requirements encompass the magnitude and properties of their crypto holdings. Additionally, their underlying business models, coupled with the internal accounting principles focusing on crypto sales and the subsequent income, will render a more transparent operations view.
This obligatory disclosure is the aftermath of the Virtual Assets Act, passed by the parliament in June, which aim is to heighten accounting lucidity within digital asset transactions. It’s a strategy that’s designed to fortify investor protection by fostering a transparent crypto market. Given the magnitude of crypto users in South Korea, with the country’s currency, the Won, trailing just behind the U.S dollar and Japanese yen in Bitcoin transactions, this move holds significance.
The ripple effect of these new laws is already felt within the nation. The legislation, comprising 19 crypto-related passages, now permits the central bank of South Korea together with the SFC to monitor crypto firms’ activities. In addition, these authorities can now legally enforce penalties on crypto companies flouting the laws.
What’s more, it’s not just the firms feeling the heat, but insiders as well. Following an accusation against a member of Parliament for disposing of his tokens ahead of the new regulations rollout, the FSC demanded its staff declare their crypto holdings. This move to update its Code of Conduct restricts employees handling digital assets from leveraging non-public information for investment in these assets. Any employee found owning crypto must now report their holdings to the Commission.
Interestingly, South Korea is not at the frontier of this trend. Ukraine had previously paved the path, enforcing a law that mandates sitting MPs to disclose their crypto assets. So even as these new regulations build up tension in the industry, the critical aspect that stands out is transparency. The larger question is, will such practices become commonplace across multiple jurisdictions? Only time will tell.
Source: Cryptonews
