World’s Biggest Financial Firms Orders Employees To Reveal Crypto Investments; Rs 25,000 Fine?

The Big Four accounting firms—Deloitte, PwC, EY, and KPMG- have asked their executives and partners to divulge cryptocurrency investments made by them or their family members during the year.

Their Motives

The move is a part of the companies’ annual risk-assessment process for which they sought details of investments in non-fungible tokens or NFTs or other crypto assets as well.

Partners in Deloitte and PwC have been asked to disclose investments as miniscule as Rs 10 in such assets.

Insiders believe that the companies are mainly concerned about conflict of interest if partners or their family members have invested in crypto assets.

RBI And Conflict Of Interest

The Big Four work closely with the Reserve Bank of India (RBI) and the government on many projects.

Due to this partnership, the firms may wish to be transparent and honest in the eyes of the regulator.

It is mainly executives and young partners that invest in such assets, whereas the older ones stick to traditional investments such as equity and real estate.

Annual Exercise

Not all employees are being asked to share details of their investments in this space, with the focus being on the 1,600 or so partners in the Big Four firms.

They lead certain service functions such as consultancy, taxation or audit.

While they are required to divulge details of their liabilities and assets every year, including investments such as equity, mutual funds, this year cryptocurrency has been added to the list.

In PwC’s case, every staff member, including associates, have to participate in the exercise.

No Ban But Punishment For Non Disclosure

Till date, none of the big 4 have barred any of their staff or associates from investing in cryptocurrencies.

They do, however, mete out punishments for hiding transactions relating to that. 

Staff has to keep an eye out on their family members’ business as well, lest they invite a substantial penalty.

In one such instance, an executive was quizzed after it was found that her husband may have invested in cryptocurrencies worth about Rs 10,000 in July this year.

She was fined Rs 25,000 by the compliance department for hiding this information.

Levels Of Punishment

The department comprises 100-150 people who verify the truthfulness of disclosures made by partners

Another partner has advised those having invested in crypto or their family members to come clean.

Hiding this information invites varying degrees of punishments where level 1 is just a warning but level 4 is a sackable offence.