Shapella Upgrade to Have limited Impact on ETH’s Selling Pressure

Korean Financial Regulator Reveals Crypto Accounting Guidelines to Prevent Inflated Company ValuationsThe Korean Financial Services Commission (FSC) has announced new regulations to address accounting uncertainties in the blockchain industry, according to local news outlet KBS News. The rapid growth of the industry and the increasing impact of cryptocurrency transactions on corporate accounting have resulted in confusion due to the lack of clear guidelines.Last month, the National Assembly’s plenary session passed the Virtual Asset User Protection Bill, emphasizing the need for improved regulation. In line with this development, the FSC has introduced practical guidelines and measures to resolve accounting uncertainties.The FSC has introduced two measures to achieve this goal: virtual asset accounting guidelines and mandatory disclosure of virtual assets in annotations within financial statements.Photo by Beatriz Pérez Moya on UnsplashAccounting guidelinesThe virtual asset accounting guidelines state that when an issuer sells virtual assets to a customer, they must fulfill all obligations, such as the sales process, in order to recognize it as revenue. Any costs incurred during the issuance of a virtual asset and the creation of its platform should be recognized as expenses, unless there is clear evidence that these activities specifically contribute to the development of the virtual asset. Additionally, any reserved virtual assets after issuance cannot be treated as assets on the company’s balance sheet. These guidelines aim to prevent companies from artificially inflating the value of their companies using virtual assets.When recognizing virtual assets as assets or liabilities, virtual asset service providers (VASPs) must consider the concept of economic control. Economic control refers to the entity’s authority to dispose of a virtual asset without needing customer authorization.Virtual assets in annotationsFurthermore, companies are obligated to disclose their virtual asset transactions and holdings in annotations to the financial statement. This requirement ensures that users of corporate accounting information have sufficient details. Public companies holding virtual assets for investment purposes must state the basis for classifying the assets as assets or liabilities. They must also provide the book and market values of their virtual assets in their financial statements.Companies that have created or issued virtual assets are required to provide comprehensive information about the quantity and characteristics of these assets. They must also explain their revenue recognition methodology in the event of asset sales. Companies must provide disclosure regarding the historical utilization of cryptocurrencies that have been issued but remain unsold. This disclosure includes various factors such as portfolios and volumes.VASPs must disclose the volume and market value of virtual assets entrusted to them by customers for each asset, regardless of whether these assets are recognized as assets or liabilities. VASPs also have to provide information about the level of protection measures they have implemented to mitigate risks such as hacking.The FSC expects that these measures will enable readers of financial statements to make meaningful comparisons between VASPs while ensuring the provision of reliable information.The accounting guidelines, after incorporating industry feedback, are expected to undergo deliberations and resolutions by both the accounting standards review committee and the Korean Securities and Futures Commission, as per local news outlet Kyunghyang Shinmun. Once the guidelines receive final approval, they will be promulgated and implemented immediately. This process is anticipated to take place between October and November.Meanwhile, the inclusion of virtual asset disclosures in the annotations of financial statements will be enforced next January.

As Excitement for First US Spot Bitcoin ETF Intensifies, South Korea Still Faces Mountain to ClimbThe price of bitcoin has surged significantly as it recorded an 18% increase in the past week, spurred by mounting anticipation surrounding the US’ first spot bitcoin exchange-traded fund (ETF) propelled by asset management juggernauts BlackRock and Fidelity Investments — a threshold that had not been crossed in over a year. According to CoinMarketCap, bitcoin is trading in the upper $33,000 range as of 5 p.m. KST on Wednesday.Photo by André François McKenzie on UnsplashOngoing buildupThe approval of a spot bitcoin ETF — long rejected or delayed due to a plethora of reasons like the volatility of cryptocurrencies and their susceptibility to market manipulation — would in the long run open up the possibility for institutions to earmark bitcoin as a major asset that can be integrated into the sphere of traditional finance. This would make bitcoin easier to handle and increase its exposure to traditional investors. “The mere possibility of this development marks a significant shift in the market landscape,” said an unnamed executive at a Korean asset management company in a news article by South Korean news outlet Maeil Business Newspaper.BlackRock’s spot bitcoin ETF, the iShares Bitcoin Trust, was also listed on the US Depository Trust & Clearing Corporation (DTCC)’s website with the ticker symbol IBTC on Monday before it mysteriously disappeared the following day. It has since been relisted on the website. The listing is “all part of the process of bringing ETF to market”, as explained by Bloomberg’s senior ETF analyst Eric Balchunas via his X (formerly Twitter) account on Tuesday.Is a spot bitcoin ETF on the table for Korea?However, Korean experts believe that there are still numerous hurdles to overcome in order for a spot bitcoin ETF to settle in Korea. In particular, some question whether cryptocurrency platforms that offer custodial services can even be classified as exchanges. There is also the issue of bitcoin’s varying prices across different exchanges. Its current price on Upbit, the country’s largest crypto exchange, is in the KRW 45.9 million range as of 5 p.m. on Wednesday. Local financial authorities have reportedly expressed skepticism about bitcoin ETFs for these reasons, suggesting a murky future for this development becoming a reality in Korea.

Com2uS Holdings subsidiary Com2uS Platform has acquired a certificate of Personal Information and Information Security Management System (ISMS-P), an official certificate distributed by the Korea Internet and Security Agency (KISA), for its blockchain-based game development platform Hive.Photo by Towfiqu barbhuiya on UnsplashStreamlining game developmentHive allows developers to focus on content development by providing functions for game launch and operation in a single software development kit (SDK). It covers all systems needed to run a game, including billing, gameplay across multiple platforms, global login and verification, compliance, support, analytics, promotions, push notifications, community management and blockchain middleware. It is utilized in over 150 games and 41 corporate clients with some 100 million annual users. Robust security measuresTo receive the ISMS-P certification, companies are evaluated based on 101 different criteria, including organizational structure, management of employees and facilities, security of information processing systems and more areas related to handling personal information. "Com2uS Platform and Hive have established and promoted world-class security policies," said Choi Seok-won, CEO of Com2uS Platform. "We will continue to do our best to create an environment where users and customers worldwide can safely enjoy our content." Com2uS Platform also revealed that it runs an office dedicated to information protection, which manages data from Com2uS games and external clients. The company also strives to improve its technological capabilities for enhancing security and conducts annual company-wide training for all employees to raise security awareness. Since 2017, Com2uS Platform has retained its ISMS certification – similar to the ISMS-P but without personal information security standards – to safeguard the information of its users and customers.