Accounting for Crypto

For more information about How to Account for Crypto, and to access the 60' webinar visit https://solteszinstitute.com/

Managing and accounting for cryptocurrencies has become a key focus for businesses as digital assets are increasingly used in everyday operations. Yet, properly handling crypto from both an accounting and compliance perspective is no simple task, given the lack of consistent rules and standards. To keep everything clear and within legal boundaries, businesses must carefully plan and execute their crypto related transfers and asset movements.

One of the main obstacles when accounting for cryptocurrencies is that many traditional banks and exchanges still don’t fully support or recognize these assets. This makes it difficult for businesses to keep reliable records of transactions, which is essential for accurate bookkeeping. On top of this, different tax rules and regulatory requirements in various countries make things even more complicated, especially for companies which operate internationally. Auditors face similar difficulties, as they need clear evidence to validate financial statements, which is often either missing or incomplete for crypto related transactions or wallets.

There are also serious risks that businesses need to keep in mind. Payments from unknown crypto wallets can create significant problems related to anti-money laundering (AML), as it’s hard to verify where the funds are coming from. If a company unknowingly accepts funds linked to illegal activities, it could face heavy penalties. For this reason, it’s crucial to have solid fraud detection systems in place and to stay on top of any legal requirements that apply.

Another challenge comes from how banks view crypto. While some are open to working with digital currencies, many traditional banks remain wary. This cautious approach can lead to problems when converting crypto into regular money, such as inconsistencies in bank statements, issues with financial records, and potentially damaged banking relationships. In some cases, this can even result in accounts being frozen or banks refusing to continue working with businesses that handle crypto - even one transaction can cause?serious damages with banking relationships and can increase our risk score.

Even for companies using regulated exchanges, difficulties remain. Automatic tax deductions, country-specific rules, and varying reporting obligations can create a tangled web of requirements that businesses must carefully manage. This means that having a well-thought-out compliance strategy is essential, particularly when handling international crypto transactions.

The volatility of cryptocurrencies adds another layer of challenge to financial reporting. The value of digital assets can swing wildly, tempting businesses to tweak their financial results by reporting more favorable rates. However, this can lead to mistakes in tax reporting and create inaccuracies in financial statements. To avoid these issues, it’s vital to keep detailed records and follow reporting rules to ensure both financial stability and transparency.

For international companies, things can get even trickier when certain countries decide to ban crypto altogether. Such bans can cause serious headaches when it comes to reporting finances across a group of companies. This makes it all the more important to have a solid plan to ensure that crypto assets are managed legally and transparently across all locations.

To keep these risks under control, businesses should only bring crypto into their operations when it truly makes sense and always with careful planning. It’s important to consult with professionals to create a clear strategy that covers banking, payments, and compliance.?

The payment team, legal advisors, accountants, treasurers and even sales should all be fully aware of any plans involving crypto. Proper due diligence on transactions and treating crypto with the same level of care as regular money are key steps in staying compliant and keeping operations running smoothly.

For more information about How to Account for Crypto, and to access the 60' webinar visit https://solteszinstitute.com/

How can PSP Angels help

PSP Angels Group is an independent payment consulting firm.

We understand the payment market and have a huge network of different banks and financial providers, so we can give?our?clients an accurate picture of all the different payment and banking options.

We know the payments market’s ever-changing risk appetite and licensing requirements, as well as what fees are currently offered. We help?our?clients make informative decisions about the possible options, prices and risks.

Within?our personalized payment consulting services, we set up an overall payment plan, help to move funds between countries, reduce real banking and payment risks, re-negotiate current fees to match the lower market rates, optimize tax and cash flow, and assist with the overall payment/banking setup.

Helping?our?clients to take their business globally, we explain what country uses which types of payment options and we also refer them to local payment providers for safer and cheaper banking and financial products. We have several partners who offer payment solutions, alternative payment methods, mobile payments, wallets, open banking, vouchers, crypto payments, chargeback and fraud tools, cashiers, and correspondent banks, based on individual circumstances and needs.

Our Cyprus?branch offers?various?fiduciary, accounting, taxation and audit services, where we assist companies not only during their operation, but also from incorporation, including company setup, licensing (office and personal setups, executive and non-executive directors, AML officers, lawyers, software providers, correspondent banks etc.)

Our Malta?branch offers?banking and payment consulting, aimed specifically for the iGaming and Gambling industry.

Via?our new Greek?branch, we now offer in mergers and acquisitions of financial licensed companies such as brokerages, crypto exchanges, banks, E-money institutions, small payment institutions, money service businesses insurance, and remittance companies, etc. globally

We also specialize in payment and financial evaluations on different projects to assist.

In both 2023 and in 2024 PSP Angels won the Payment Consultants of the Year award by Acquisition International Magazine https://www.acquisition-international.com/winners/psp-angels-2/ and https://www.acquisition-international.com/winners/psp-angels-3/ . The company has also won the Most Insightful Payment Consultancy Firm 2023 award by Corporate Vision Magazine https://www.corporatevision-news.com/winners/psp-angels-2/ and the Best Blockchain Services of the Year 2023 by Crypto Expo Europe.

PSP Angels was at the TOP 10 startups from Cyprus by the Industry Outreach Magazine.

For more information about How to Account for Crypto, and to access the 60' webinar visit https://solteszinstitute.com/