In what's stated as a part of their annual risk assessment process, the Big Four professional services firms--Deloitte, PwC, EY and KPMG--have reportedly asked their executives and partners to disclose information regarding this year¡¯s cryptocurrency investments made by them or their family members. The disclosure should also include details of investments in non-fungible tokens or other crypto assets.
As per the disclosure call and what the people familiar with the matter have reportedly told ET, two of the firms, Deloitte and PwC¡¯s partners have been told to reveal investments as tiny as Rs 10 in such assets. Insiders are of the view that the primary concern of firms is the conflict of interest if partners or any of their family members have invested in crypto assets.??
There are approximately 1,600 partners in the Big Four firms who lead certain service functions such as consultancy, taxation or audit. So far, partners were asked to divulge details of their liabilities and assets every year, including investments such as equity, mutual funds and now cryptocurrency.
A senior partner at one of the firms was quoted saying ¡°Most of these investments are done by the executives and young partners as most of the older ones stick to traditional investments such as equity and real estate¡±.
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It's important to remember that this move from Big Four, who work closely with the Reserve Bank of India (RBI) and the government on many projects, comes after a series of instances in recent times when the RBI has been pretty vocal about not just regulating but even banning crypto in the country. But the regulation or ban on crypto is something that remains to be seen, with India¡¯s crypto bill yet to be tabled and cleared in the Parliament.
It's also been heard that the firms are even telling their employees to stay away from stablecoin investments such as USDT and USDC. Stablecoins are cryptocurrencies whose value is derived from an underlying asset - dollars or gold in most cases. All of the big four firms are actively working on many blockchain projects. So, to understand the technology better, many of these firms¡¯ tech employees and partners have invested in crypto.
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On one hand, these big four firms are strictly encouraging disclosure of all crypto investments, on the other hand, none of them has actually barred crypto investments. Some crypto investments like stablecoin might be advised against by the firms due to regulatory pressure, but they can¡¯t legally ban personal investments of any sort, especially until the much-anticipated crypto bill comes up and clears the air regarding the future of the crypto industry in India.?
As far as disclosure is concerned, it is an important part of these firms' auditing process. Earlier this year, one of the big 4, PwC, had reportedly questioned an executive after discovering that her husband made a ?10,000 worth of crypto investment, and the compliance department had even fined the executive a substantial amount for not disclosing this investment. So, it becomes needless to say that it¡¯s certainly wiser for the executives and partners of these big 4 firms to clearly abide by the rules and disclose the details regarding all crypto investments.
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