Key takeaways:
- The South Korean government continues to create stricter regulations for the crypto business.
- The FSC reviewed related recommendations and approved the exposure draft bill that adds provisions for mandatory disclosure.
With the passage of new asset disclosure legislation, the South Korean government continues to create stricter regulations for the cryptocurrency business.
The Financial Services Commission (FSC) of South Korea introduced a new bill on July 11 that will mandate that all businesses that issue or hold cryptocurrencies like Bitcoin reveal their holdings. After the Virtual Asset User Protection Act was passed on June 30, these provisions are intended to increase accounting transparency.
According to the release, the FSC reviewed related recommendations and approved the exposure draft bill that adds provisions for mandatory disclosure of cryptocurrency.
According to supervision requirements that mandate accounting for each cryptocurrency-related transaction, the new procedures aim to increase openness in accounting and disclosure of crypto assets. The project also seeks to update the accounting guidelines that mandate the disclosure of transactions involving virtual assets.
The FSC stated that fungible assets based on distributed ledger technology or a “similar technology,” as well as those issued using cryptography, are included in the scope of crypto assets that must be disclosed in the current draft version of South Korea’s crypto accounting supervision guidelines. The regulator said the Capital Markets Act’s definition of digitized securities, or security tokens, includes them in the guidelines’ field of application.
The amended disclosure standard will go into effect on January 1, 2024, whereas the new accounting oversight guidelines are effective immediately. The FSC noted:
“Early application is possible and is strongly recommended,”
The announcement follows local business media’s recent allegation that the FSC had mandated that internal staff members disclose any cryptocurrency holdings that met the criteria set forth in the Specific Financial Information Act.
The impacted workers apparently include those who presently carry out crypto-related tasks as well as those who have done so in the previous six months.
Even though the most recent crypto disclosure laws are still somewhat new, South Korea has previously mandated that public servants disclose their cryptocurrency holdings.
The National Assembly of South Korea unanimously approved a bill requiring politicians and senior public officials to disclose their cryptocurrency holdings. The measure, popularly known as the “Kim Nam-guk Prevention Law,” was introduced in response to a crisis involving some public officials who were reportedly moving significant quantities of cryptocurrency and manipulating the market.
