What was your journey into cryptocurrency like? What initially caught your attention and why?
We entered the blockchain / crypto space over 5 years back and back then, we had no idea what blockhain was. We spent quite a lot of time learning and educating ourselves and creating customized solutions for our blockchain clients based on their unique scenarios. We are also heavily involved with several blockchain groups where we are sharing our thoughts and speaking nationally.
When did your firm begin offering crypto accounting as a service? What specific services do you offer to crypto clients?
We began with audit and tax initially and then expanded into many more. Today, we help blockchain companies with their audit, SOC, tax, valuation, outsourced accounting and audit readiness needs. Additionally, we also advise blockchain companies during their strategy as they are considering use cases, and implementing solutions.
What are the top three mistakes you see crypto clients make when it comes to accounting?
Tracking and accounting for the basis of the crypto correctly from day 1, commingling personal crypto transactions with company transactions and not documenting the nature of the transactions from the very beginning along with appropriate supporting documents.
What are the top three challenges when it comes to accounting for crypto?
Lack of accounting guidance makes it difficult for accounting of the crypto currencies. Valuation considerations and lack of consistency in applying valuation principles especially for thinly traded tokens. Lastly, constant changes and evolution of the industry itself where trends like forks, swaps, airdrops makes it difficult for companies to monitor what is going on in this space and how it impacts their accounting.
What's the future of crypto accounting?
I think as the industry matured, crypto accounting will mature as well. There will be more guidance from standard setting bodies which will help accounting process. For eg. In the US, IRS recently announced that they will be releasing guidance on certain crypto matters soon. We are also working closely with the AICPA who is actively looking into accounting challenges for crypto. Also I think the current accounting tools for crypto will continue to build layers of sophisticated modules that address the current challenges and make accounting easier.