Samil PwC seminar informs companies about crypto accounting amid shifting Korean regulations

Kandle Secures Funding for Platform DevelopmentSingapore-based crypto fantasy GameFi startup Kandle has recently secured $1.7 million in a seed funding round, with Saama Capital, a venture capital firm that invests in early and growth stage tech sector companies, leading the investment.Other participants in the funding round included PointOne Capital, Cloud Capital, Good Capital, Founder’s Room, Seeders Fund, and Sumit Gupta, CEO of crypto investment platform CoinDCX.The GameFi concept is an innovative fusion of blockchain technology, gaming, and decentralized finance, allowing players to earn cryptocurrency and non-fungible tokens (NFTs) while playing games on the platform. Additionally, GameFi enables the transfer of in-game items to the virtual world, enabling trade on NFT marketplaces and crypto exchanges.Photo by Towfiqu barbhuiya on UnsplashExpansion plansKandle stands out by offering fantasy games that incorporate crypto tokens, where players compete to win various rewards. Already gaining traction in Southeast Asian countries like Indonesia and Vietnam, as well as in burgeoning markets such as Nigeria and India, Kandle has ambitious plans to expand its footprint across Asia and North America.As part of its efforts to realize that expansion, funding is being used to build out the Kandle platform further, expanding its user base into the bargain. Founder Jaideep Yadav expressed enthusiasm about the potential of gaming and crypto coming together, positioning Kandle at the forefront of this evolving landscape.Yadav stated: “There is a massive opportunity at the intersection of gaming and crypto, and we’re excited to be at the forefront of this evolution in crypto fantasy gaming. Super grateful for the unwavering support of our investors as we forge ahead in bringing the vision of Kandle to fruition. “Project roadmapLooking ahead, Kandle aims to unveil its project roadmap, which will include token issuance, token utility, and a play-and-win model designed to reimagine the play-to-earn ecosystem. Notably, Kandle has taken a unique approach by prioritizing the development of a fully functioning, sustainable gaming product based on sound gaming principles rather than merely focusing on project tokens. The team plans to integrate smart contracts to ensure transparency, security, and fairness in the gaming experience.Ash Lilani, the Managing Partner at Saama Capital, commented on the importance of making the crypto industry safer for the next wave of users. He praised Kandle’s gamified approach for providing a secure and unique way for users to engage with crypto without taking direct exposure to any specific coins.Kandle’s funding success signifies the increasing interest and investment in the GameFi space, which merges the excitement of gaming with the possibilities offered by blockchain and cryptocurrencies. News of the investment comes within the same time frame as an announcement by Sky Mavis, the team behind Axie Infinity, which is also Singapore-headquartered, which sees it partner with CyberKongz, an Ethereum-based non-fungible token collection.The development of blockchain gaming has not progressed in a neat straight line. It’s been imperfect but ongoing activity in the sector suggests that ultimately, GameFi start-ups will continue to evolve until such time as a mass market breakthrough is made in gaming.

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.

Upbit Operator Dunamu Assists Indebted Youths in Rebuilding Credit ScoresDunamu, the operator of South Korean cryptocurrency exchange Upbit, has announced an initiative aimed at helping indebted youths rebuild their credit scores. The company will accept applications from July 19 through August 20. Eligible individuals must be residents of Seoul, Gyeonggi-do, or Incheon, aged between 19 and 39, and have successfully completed debt workout arrangements.Photo by Towfiqu barbhuiya on UnsplashGiving backThe project, called Dunamu Next Dream, is part of the company’s efforts to give back to the community by using revenue generated from Luna Classic (LUNC) transaction fees. In September of last year, Dunamu committed to allocating the LUNC transaction fee profits of 239.13025970 BTC to investor protection. After consulting with an external advisory committee, the exchange operator decided to donate around 3 billion KRW ($2.3 million) to public organizations and utilize the remaining funds to provide financial and credit support.To implement the Dunamu Next Dream project, Dunamu entered into a memorandum of understanding (MOU) with the Credit Counseling and Recovery Service (CCRS) and the Social Solidarity Bank (SSB) in April.Two componentsThe project consists of two main components: financial consulting and emergency loans. The initial focus will be on financial consulting, which includes support for living expenses. The aim is to assist indebted youths in developing healthier financial habits. Financial experts will provide six sessions of financial consulting, addressing their recurring indebtedness and fostering financial independence. Additionally, each individual will be granted a living expense of 1.2 million KRW ($950) to ensure they can meet timely interest payments.Dunamu will collaborate with the CCRS and the SSB to conduct a comprehensive review of applicants and select 150 deserving beneficiaries. The selection process will involve thorough evaluation through paper screening and interviews, allowing applicants to demonstrate their dedication and financial responsibility.The second component of the project, emergency lending, will launch in September. It aims to provide interest-free loans of up to 2.5 million KRW to individuals facing immediate needs, such as medical fees.Dunamu CEO Lee Sirgoo highlighted the importance of this project, emphasizing the challenges faced by young people who are the future leaders of society. The economic struggles they encounter can have significant repercussions for society as a whole. Accumulating debts has made it difficult for young individuals to achieve financial stability and advance their careers. Lee stressed the need for public awareness regarding this issue, as it is crucial for young people to establish themselves promptly within society.