KPMG, one of the top four accounting companies globally, has teamed up with Cryptio, a cryptocurrency accounting software provider, to support U.S.-based crypto companies in adhering to Generally Accepted Accounting Principles (GAAP). This strategic cooperation seeks to improve the precision and dependability of cryptocurrency companies’ accounting for their assets through the implementation of efficient controls.
Brian Consolvo, KPMG principal for technology risk, stressed the importance of improving digital asset accounting procedures and complying with U.S. regulatory requirements. He noted, “KPMG recognizes the value of accurate reporting and accounting, the risks associated with crypto assets, as well as the need for robust internal controls.”
The collaboration will enable crypto institutions and businesses to fulfill their GAAP reporting and accounting requirements using Cryptio’s software.
Antoine Scalia, CEO and founder of Cryptio, noted that this alliance is essential to the long-term viability of the cryptocurrency market. “Our partnership with KPMG gives businesses and organizations the assurance they need to handle accounting procedures, audits and regulatory reporting,” said Scalia. “By working together, we are creating a standard for regulated organizations implementing digital assets.”
Kunal Bhasin, who leads the digital assets practice at KPMG Canada, noted that increasing debt and inflation are the main reasons pushing institutional investors toward cryptocurrencies.
A recent survey by KPMG found that in 2023, almost 40% of institutional investors had interacted with cryptocurrency assets, up from 31% in 2021. Out of the 65 participants in the poll, 31 were institutional investors that oversee assets valued at more than $500 million, and the remaining 34 were financial services companies.
Additionally, the poll showed that, compared to two years ago, one-fifth of these institutional investors now held 10% or more of their portfolio in cryptocurrency assets. The market’s maturing, and enhanced custody infrastructure, are two important drivers of the rising customer demand for services related to crypto assets.
Crypto financial reporting requirements are being advanced globally. For instance, in Hong Kong, a new software called FinTax is assisting individuals in filing their taxes amid the rise of cryptos. The region has also approved spot Ethereum and Bitcoin ETFs, demonstrating the global efforts to regulate the crypto sector.
In the U.S., the Securities Exchange Commission has made it clear that brokerage houses and banks are not compelled to disclose their clients’ crypto holdings in their registrations. The goal of this strategy is to guarantee that financial institutions can handle the risks involved efficiently.
It remains to be seen whether the solution offered by Cryptio and KPMG is superior and more cost-effective in comparison to the in-house mechanisms that industry actors such as BitFuFu Inc. (NASDAQ: FUFU) had put together to address their needs.
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