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Preparing for New Crypto Regulations - Eton Venture Services' Valuation Services

Stay Ahead of the Game: Understanding the Upcoming Changes in Crypto Regulations


Now more than ever, it is vital that companies working within the crypto space do all they can to comply with regulator’s demands. One of the many benefits of obtaining an honest and accurate crypto valuation service is that it provides a framework for being compliant with current regulations as well as increasing the odds of remaining compliant into the future.


Following the many significant events of 2022 involving the crypto asset industry, it is likely that the regulatory environment could be in for some big changes ahead.


In November 2022, Richard Jones, chair of the FASB, told an industry conference that an FASB proposal on the accounting for cryptocurrencies will be issued during the first half of next year to solicit public feedback. According to industry sources, the FASB has decided to limit the guidance to fungible tokens, deemed to be intangible assets, secured through cryptography on a blockchain or distributed ledger, and do not provide the asset holder with enforceable rights to or claims on underlying goods, services, or other assets. Further, the tokens would be measured at fair market value as that reflects the underlying economics of those transactions.


In addition, in December 2022, the SEC issued new guidance on the disclosure of crypto and all digital assets held by companies. The guidance advises companies to disclose their involvement with digital assets and any related risks or exposure in their public filings, such as annual and quarterly reports. This includes disclosing any material events or developments related to digital assets, as well as any risks associated with holding or using digital assets, such as price volatility, security vulnerabilities, and regulatory uncertainty.


The purpose of this guidance is to provide clarity and transparency for investors and other stakeholders about a company's involvement in the crypto asset industry. It is designed to ensure that investors have the necessary information to make informed decisions about the risks and potential rewards of investing in companies that hold or use digital assets. The guidance is not a rule or regulation, but rather a set of recommendations for companies to follow when disclosing their digital asset activities.


This could be the beginning of a new regulatory regime regarding crypto.


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