While being enticing enough to be increasingly accepted as a mainstream investment, the risks associated with cryptocurrencies continue to define the sector. Recently, the world’s Big 4 professional services firms – Deloitte, PwC, EY, and KPMG – have requested their Indian employees to make digital asset disclosures, according to local media.
Partners and executives at these firms will be required to disclose any crypto investments, which include NFTs and all other digital assets, made by them or their family members during the past year. This is a part of the annual risk-assessment process carried out by these companies.
According to insider sources quoted by Economic Times, at least two firms – Deloitte and PwC – have asked their partners to disclose investments even as low as ₹10 ($0.13).
The reason behind soughing this information is the fear of a potential conflict of interest. A senior exec at the firm noted that while older partners have stuck to traditional investments, younger ones are more inclined to invest in digital assets. This could spell trouble as the firms are involved in many linked directly Reserve Bank of India (RBI) and the Indian government.
While most firms have asked only their partners and executives to disclose such investments, PwC has requested the same from all its employees. The report further noted that partners were anyway required to disclose all their liabilities and assets every year, which this year also included cryptocurrencies. This could also act as a positive signal towards cryptocurrencies entering the mainstream investment market.
The report also added that although none of the companies have ordered abstinence from crypto investments to any of their employees, their compliance departments are levying heavy fines on those failing to make full disclosures.
This development is a clear indication of these companies mobilizing crypto compliance as the Indian government gears up to impose harsh crypto regulations. However, it does not indicate skepticism towards the industry by these giants, who have shown increasing curiosity towards the same over the past few years.
For instance, KPMG has been promoting the acceleration of cryptocurrency institutionalization for years, even launching a cryptocurrency management platform last year which is designed to boost institutional adoption. PwC’s Hong Kong arm even bought a virtual plot of land in The Sandbox metaverse recently, which it will now pitch as an investment to curious clients.
These companies are also engaged in crypto research and blockchain development and are constantly looking at ways to adopt these novel technologies into their huge suite of financial and consulting services.