8 ways crypto companies can improve their financial compliance in the US

Cointelegraph Innovation Circle9 hours ago8 ways crypto companies can improve their financial compliance in the USAbsent clear, comprehensive regulatory guidance in the U.S., crypto companies would be wise to shore up their accounting systems.288 Total viewsListen to article 0:00Innovation CircleJoin us on social networksThe U.S. presents many obstacles to crypto companies, with a multiplicity of federal and state regulatory agencies having real or potential jurisdiction over the industry. Its unique political environment has contributed to more governmental skepticism toward crypto than is seen in other countries, and high-profile punitive actions by the Securities and Exchange Commission are making many crypto companies nervous about maintaining a foothold in the U.S.

Despite all this, there is also high-profile support for crypto in the U.S., so many crypto companies will be unwilling to abandon or postpone entry to the U.S. market. While there may not be a single set of clear, comprehensive guidelines for crypto companies in the U.S., there are smart strategies that can help them stay on the right side of regulators. Below, eight members of Cointelegraph Innovation Circle share tips to help crypto companies improve their accounting procedures and compliance standing in the U.S. Use private blockchains

The obvious answer is to use private blockchains. The entire purpose of blockchain is to enhance the ability to do credible accounting at scale. Permissioned access preserves privacy while lowering the cost of delivering provably raw data for accounting. Those proofs, rather than the data itself, can be sent for compliance to a blockchain shared with regulators.  –Stephanie So,Geeq Maintain precise records

After the U.S. stablecoin, Binance and Coinbase crackdowns, I think it’s clear the current U.S. administration and the SEC are on a crypto witch hunt. Companies based in the United States may be targeted by regulators even if they believe they are fully compliant. Because of this, maintaining precise records of customer funds and money movements has never been more crucial. –Sheraz Ahmed,STORM Partners Adopt a rule-based system

We have seen many crypto companies fall due to accounting issues. Adopting a rule-based system improves the situation. Compliance and procedures should follow established rules to safeguard accounts. Even though the SEC and other key players haven’t clarified crypto regulations, blockchain solutions ensure accountability. Therefore, maintaining clear records of customer funds and money movement remains crucial. –Ilias Salvatore,Flooz XYZ

Join the community where you can transform the future. Cointelegraph Innovation Circle brings blockchain technology leaders together to connect, collaborate and publish. Apply today Prioritize transparency and collaboration

Crypto companies must prioritize transparency, comply with existing regulations and collaborate with stakeholders to improve their accounting procedures and compliance in the U.S. Robust accounting systems, adherence to Anti-Money Laundering and Know Your Customer requirements, and active engagement will foster trust and industry growth. –Vinita Rathi,Systango Give wallet holders P&L summaries

Summarizing the trades done by each wallet and presenting that summary to the wallet holder in a detailed profit and loss summary would be a good start. Obviously, there are issues like mark-to-market considerations, current tax laws and loopholes, but for now, providing a summary of trades and a P&L statement would be a good start. –Zain Jaffer,Zain Ventures Implement blockchain-specific accounting software

One vital step crypto companies can take is implementing blockchain-specific accounting software. It accurately tracks and records transactions and assists with tax reporting. Furthermore, engaging regularly with crypto-focused accountants or legal experts can help crypto companies navigate evolving regulations and ensure ongoing compliance. –Tomer Warschauer Nuni,Kryptomon Establish regular internal audits

Implement robust internal controls and regular audits. This includes establishing clear financial policies and procedures, segregating duties, conducting periodic independent audits and ensuring proper documentation and record-keeping. These measures can help ensure accurate financial reporting, detect and prevent fraud, and demonstrate compliance with regulatory requirements. –Theo Sastre-Garau,NFTevening Don’t wait to bring in the experts

It may be expensive for early-stage crypto companies to hire lawyers and compliance professionals, but doing so can actually reduce costs down the road. If you wait until later stages to prioritize legal and regulatory compliance, it can be very burdensome to implement best practices and fix noncompliant products. –Wolfgang Rückerl,ENT Technologies AG

This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.

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