The South Korean government is continuing to develop tighter regulations targeting the cryptocurrency industry with the introduction of new asset disclosure rules.
On July 11, South Korea’s Financial Services Commission (FSC) announced a new bill that will require all firms that issue or hold cryptocurrencies like Bitcoin (BTC) to disclose their holdings.
According to the announcement, the FSC reviewed related proposals and gave the green light to the exposure draft bill that introduces mandatory disclosure requirements for crypto.
The new measures aim to enhance transparency in accounting and disclosure of crypto assets in line with supervision guidelines that require accounting for each transaction involving crypto. The initiative also targets revision of accounting standards that obligates disclosure of virtual asset transactions.
In the current draft version of South Korea’s crypto accounting supervision guidelines, the FSC mentioned that the scope of crypto assets to be reported includes fungible assets based on distributed ledger technology or a “similar technology,” or those issued using cryptography. Security tokens, or digitized securities under the terms of the Capital Markets Act, are also included in the scope of application of the guidelines, the regulator noted.
While the new accounting supervision guidelines come into effect immediately, the revised disclosure standard will be implemented starting from Jan. 1, 2024. “Early application is possible and is strongly recommended,” the FSC noted.
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The news comes soon after local industry media reported that the FSC required internal employees to report their crypto holdings as defined under the Specific Financial Information Act. The affected employees reportedly include those who currently perform crypto-related duties and those who have performed such duties over the past six months.
While the latest crypto disclosure rules are somewhat new, South Korea has already required government officials to declare their crypto holdings.
South Korea’s National Assembly unanimously passed a bill that obliges lawmakers and high-ranking public officials to report on their crypto assets. The initiative, widely referred to as the “Kim Nam-guk Prevention Law,” came in response to a scandal involving some public officials allegedly manipulating the market and moving large amounts of crypto.
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