Chief Accountant At SEC Talks Crypto Holdings And “Fundamental Responsibility” To Report Activities
There are many companies that have digital assets filling up their account books to make some extra space. However, in a recent reminder from the US Securities and Exchange Commission, these types of holdings do not make them exempt from the “fundamental responsibility” of reporting their financial activities to the proper entities.
Wesley Bricker, who is a chief accountant for the SEC, issued the reminder when he attended and spoke at the AICPA National Conference on Banks & Saving Institutions. The conference took place in Washington, DC on Monday. His speaking engagement zeroed in on how the accounting industry always has to keep up with the latest technologies, considering their role as overseeing “issuer compliance related to financial reporting.”
Bricker discussed the need for companies to have a stringent approach to their accounting, and to take time in educating themselves about the latest policies. With cryptocurrency and blockchain technology becoming more widespread, it is even more important for accountants to become familiar with the industry. Innovations in technology could easily become a form of support for companies, rather than an enemy.
Elaborating, Bricker said,
“It follows that changes in technology need not work against investors and the public capital markets. Moreover, companies must continue to maintain appropriate books and records—regardless of whether distributed ledger technology (such as blockchain) smart contracts, and other technology-driven applications are (or are not) used.”
Keeping up with the current auditing requirements and compliance standards is the key for firms to pass the current federal securities laws. There are certain reporting obligations that firms have to maintain, according to Bricker.
“Distributed ledger technology and digital assets, despite their exciting possibilities, do not alter this fundamental responsibility.”
Anyone who audits companies with digital asset holdings should prepare themselves for SEC auditors that might examine their activities. The SEC has said before that there are some tokens in the crypto community that could be considered securities and would be governed as such. Furthermore, one judge in New York noted that the federal laws for securities may even apply to ICO fraud allegations.
So far, the regulators are still working to setup the laws that will apply to the use of cryptocurrency in the United States. However, it does not look like these regulations are too far away now, which is what makes it so important for companies to make sure everything is accounted for now.