BlocksInform
In the wave of cryptocurrency failures last year, auto-emitted crypto chips played important roles in the disappearance of ftx and celsius. However, last week the Financial Accounting Standards Board (FASB) said its yet-to-be-issued crypto asset accounting standards would not cover self issued tokens or those issued by related parties.
In the case of FTX, the cryptocurrency exchange held large quantities of the self issued FTT token and other related party tokens, which had a tiny circulating supply. However, it allocated the same market value to all of its locked-in tokens, $9 billion shortly before the bankruptcy.
Turning to bankrupt crypto lender Celsius, the court appointed examiner alleged that Celsius spent $558 million propping up its own CEL token price while insiders sold. It also blew up the balance in degrees Celsius.
The Fasb, which sets the standards for the U.S., has published its guidance plan piecemeal as part of its deliberations on particular aspects. The main decision taken in October was that crypto assets should be recorded at fair value, which means that prices should be marked to the market. This also includes digital assets whose markets are inactive.
In December, the fasb announced that crypto assets should be reported separately from other intangible assets, and that any material holdings should be segregated. Tokens often have periods of isolation, such that the quantity of crypto assets that cannot be sold should also be disclosed.
Apart from self-issued tokens, there are several categories of digital assets that do not fall within the scope of the standards. These are:
- non fungible tokens
- tokens that provide the asset holder with enforceable rights to, or claims on, underlying goods, services, or other assets
- wrapped tokens.
In the February update, Fasd called for staff to now write a standard.
