Given the failure of FTX, Coinbase, and other companies in the cryptocurrency arena, the U.S. Government through the SEC and other agencies has stepped forward with enforcement actions. Following the collapse of large crypto players, regulators seek to stabilize the impact on markets and flow of funds through regulated financial institutions.
What is unknown to date is the impact of these failures on publicly traded corporations carrying cryptocurrencies on their balance sheet and the valuation thereof. No doubt year-end 2022 will have more drama as the markets react and stabilize. External auditors will face some unique challenges to test management assumptions on impacts, risks, and exposure to crypto. "The FASB in August detailed criteria for assets it will include in its cryptocurrency project, leaving out nonfungible tokens and certain stablecoins. The board will next consider what will have to be included in disclosures about the assets and how companies should inform investors." Said another way, brace for sudden impact .. this will be a bumpy ride. More to follow...
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