ACCOUNTING FOR CRYPTO-ASSETS IN EMERGING MARKETS: LEGAL UNCERTAINTY AND FINANCIAL IMPLICATIONS

In South Africa’s evolving financial ecosystem, accounting for crypto-assets remains riddled with legal ambiguity and regulatory volatility-factors that significantly impair consistency, comparability, and transparency in financial reporting. This study critically investigates how legal framework complexity, financial reporting practices, regulatory volatility, and macroeconomic instability collectively influence accounting outcomes for crypto-assets between 2020 and 2024. Using secondary data from 50 purposively selected entities-including public firms, fintech institutions, and regulatory agencies-the research adopted descriptive and explanatory designs, applying statistical tools such as ADF, VIF, Durbin-Watson, and Breusch-Pagan to ensure data validity. Findings revealed that legal framework complexity (β = 0.392, p< 0.001), financial reporting practices (β = 0.371, p< 0.001), regulatory environment (β = 0.328, p< 0.001), and macroeconomic instability (β = 0.267, p< 0.001) all significantly predicted accounting outcomes, with the model explaining 80% of the variance (R² = 0.80). The correlation matrix confirmed strong relationships, especially between legal ambiguity and reporting outcomes (r = 0.86). These results confirm that institutional clarity and economic stability are central to accurate crypto-asset valuation and disclosure. The study concludes by recommending that regulators expedite the development of enforceable IFRS/GAAP-aligned crypto accounting frameworks, and that firms invest in auditor training and standardized risk disclosures to improve auditability and investor trust.