Korbit Obtains Stage 1 Certification for Global Internal Control Standards

[Asia Economy Reporter Lee Jung-yoon] Domestic virtual asset exchange Korbit announced on the 8th that it has completed the first phase of SOC 1, an internal control certification related to client financial reporting based on global standards, becoming the first in the industry to issue an SOC 1 Type 1 report.

SOC certification is a system in which an independent auditor evaluates and verifies the adequacy of internal controls of a service provider company according to certification standards established by the American Institute of Certified Public Accountants (AICPA) and the International Auditing and Assurance Standards Board (IAASB) to ensure stable service provision.

The certification is divided into SOC 1 (related to client financial reporting), SOC 2 (service security, etc.), and SOC 3 (general purpose report on service security and operations) depending on the evaluation items. Each certification is divided into two stages. Type 1 expresses an opinion on the design of internal controls as of a specific date, and Type 2 evaluates whether the internal controls were effectively operated as designed over a certain period. A report certifying each type is issued upon completion.

Korbit completed the first phase of SOC 1 last year in collaboration with Samduck Accounting Corporation and has now become the first in the industry to complete SOC 1 Type 1 certification. Korbit plans to carry out the second phase of SOC 1 this year and receive SOC 1 Type 2 certification by January next year. Meanwhile, overseas virtual asset exchanges Coinbase and Gemini have already completed both phases of SOC 1.

SOC 1 certification is essentially the international standard for internal controls related to client financial reporting. Therefore, if an auditor of a corporation using Korbit’s exchange services needs to review the exchange’s financial or accounting-related internal controls, they can determine that the internal controls are properly functioning without additional procedures by simply checking Korbit’s SOC 1 certification report. This means the internal controls are considered to be operating without issues based solely on the report content.

Additionally, it enables efficient responses during audits conducted by regulatory authorities overseeing corporations using Korbit’s services, and it can meet the changing accounting and regulatory requirements following the Sarbanes-Oxley Act, thereby enhancing the credibility of virtual asset trading services. The Sarbanes-Oxley Act is a U.S. law enacted in July 2002 aimed at accounting reform and investor protection for publicly listed companies. It was established to strengthen internal controls after the large-scale accounting fraud by the U.S. energy company Enron, with a key provision requiring the government to directly audit companies committing accounting fraud every three years. The law is named after Paul Sarbanes, then a Democratic senator, and Michael Oxley, a Republican representative, who introduced the bill.

Oh Se-jin, CEO of Korbit, said, "In a situation where voices are growing to allow foreigners and corporations to invest in virtual assets for the development of the domestic virtual asset market, it is very important for exchanges to have qualifications that match this." He added, "Korbit will strive to become a virtual asset exchange that meets global standards by successfully completing the SOC 1 certification process following last year’s first disclosure of exchange-held asset details, the first in Korea."