More companies hold digital assets on the balance sheet than ever before. Whether it is Bitcoin as a reserve asset, stablecoins for operations, or tokens earned through business activity, treasury teams face a new set of accounting, control, and reporting challenges.
The playbook from traditional treasury does not map cleanly. Digital assets move 24/7, custody looks different, and valuation can shift between the close and the sign-off meeting. The companies getting this right treat digital asset treasury with the same rigor they apply to cash—documented policies, strong controls, daily visibility, and a clean audit trail.
Custody and control come first
The first question any auditor asks: who controls these assets, and how do you prove it?
This starts with a complete wallet inventory—every address under your control, including cold storage, hot wallets, custodian accounts, and any DeFi positions. From there, you need a clear authorization matrix that documents who can initiate, approve, and execute transactions, along with threshold limits and multi-sig requirements.
For assets held with third-party custodians, retain their attestations, SOC reports, and proof of reserves documentation. And do not overlook key management—your key custody approach, backup procedures, and disaster recovery process all need to be documented and tested.
Valuation requires a defensible methodology
Digital assets require more than a price lookup. You need a documented, defensible valuation approach that auditors can reperform.
Start by identifying your primary pricing source—whether that is exchange feeds, aggregators, or custodian prices—and document why it is appropriate for your specific holdings. Timestamp conventions matter too. Whether you use UTC midnight, market close, or another reference time, apply it consistently and document the choice.
The edge cases are where teams get tripped up. What happens when a token has thin liquidity or no recent trades? Define your stale price handling before it becomes an issue. And if you have elected fair value treatment under ASC 825 and the 2023 FASB guidance, make sure that election is documented and applied uniformly.
Auditors will ask how you arrived at a number. “We used the price from the exchange” is not enough. You need the methodology, the source, and the evidence retained.
Classification drives everything downstream
Not all digital assets are the same, and classification drives accounting treatment, financial statement presentation, and disclosure requirements.
The threshold question is whether your assets qualify for fair value treatment under ASU 2023-08 or fall back to indefinite-lived intangible treatment. For most crypto assets, fair value is now available, but you need to understand the criteria and document your position.
Stablecoins deserve particular attention. Are they cash equivalents? Financial instruments? Something else? The answer affects how they appear on your balance sheet and what you disclose. There is no universal answer, but there needs to be a consistent, defensible position applied across your holdings.
The complexity increases with wrapped and receipt tokens. If you stake ETH and receive stETH, you now hold a different asset with different characteristics. The same is true for LP tokens, protocol receipts, and other DeFi derivatives. Each requires a classification decision.
Tokens subject to lockups, vesting, or regulatory restrictions need separate treatment and disclosure. Consistency matters more than perfection here—pick a defensible position and apply it uniformly.
Controls cannot take weekends off
Treasury operations for digital assets need controls that match the risk profile, and the 24/7 nature of crypto means your control environment operates around the clock.
Segregation of duties is foundational. Transaction initiation should be separate from approval. Multi-sig wallets help enforce this technically, but process documentation is what auditors actually review. Define transaction thresholds for different approval levels, just like you would for wire transfers.
Reconciliation cadence is where many teams fall short. Daily reconciliation between on-chain activity and your books is the standard for any material treasury operation. Weekly is a risk you probably should not take.
Exception handling rounds out the control framework. Failed transactions, stuck transactions, and chain reorganizations all happen. Document how you identify them, investigate them, and resolve them.
Liquidity and risk require ongoing attention
Digital asset treasury introduces liquidity and risk considerations that traditional treasury teams may not have encountered.
Not all holdings are equally liquid. A large position in Bitcoin or USDC is fundamentally different from a large position in a mid-cap token with thin order books. Treasury teams need to assess and monitor liquidity across their holdings, not just mark everything to a quoted price.
Counterparty exposure deserves constant attention. If assets sit with a custodian, exchange, or in a DeFi protocol, you have exposure to that counterparty. The collapses of 2022 taught everyone that counterparty risk in crypto is real, and boards now expect treasury teams to monitor and report on it.
Concentration risk matters for disclosure purposes. Large positions in a single asset or on a single platform may warrant footnote disclosure depending on materiality. And if you hedge crypto exposure through derivatives or other instruments, the relationship between the hedge and the underlying position needs clear documentation.
Reporting should tell the full story
What you report externally depends on materiality and your reporting framework, but internal reporting should be comprehensive enough that leadership always knows the current state of digital asset holdings.
A complete holdings report shows current positions by asset, wallet, and custodian, with both fair values and cost basis. An activity report covers period transactions with classification, counterparties, and general ledger mapping. A risk report summarizes counterparty exposures, concentration metrics, and liquidity assessments. And a reconciliation report provides the tie-out between on-chain data, subledger, and general ledger.
For public companies, MD&A and footnote disclosures need to address material digital asset holdings, the associated risks, and the accounting policies applied.
Tax and regulatory coordination cannot wait
Treasury decisions have tax consequences, and the regulatory landscape continues to evolve. Coordination between treasury and tax cannot be an afterthought.
Cost basis method—whether specific identification, FIFO, or average cost—should be elected by entity and applied consistently. Different methods produce different tax outcomes, and changing methods mid-stream creates complications.
Understanding what triggers gain recognition in your jurisdiction is essential. Swaps, staking rewards, and DeFi activity often create taxable events that treasury teams may not immediately recognize. The activity that looks like internal treasury management may have tax implications that need to be captured.
Information reporting requirements are expanding. 1099-DA is live in the US, and CARF is rolling out internationally. Treasury activity needs to feed into your tax reporting infrastructure, not exist in a parallel system that gets reconciled at year-end.
Treasury and tax need to be in sync throughout the year. Surprises at year-end are expensive.
The path forward
If your digital asset treasury runs on spreadsheets and manual reconciliation, you are behind. The volume of transactions, the complexity of DeFi, and the expectations of auditors and regulators have all increased. What worked two years ago does not meet the standard today.
NODE40 helps treasury and accounting teams turn on-chain complexity into clean, auditable records. Holdings, activity, valuations, and reconciliations—all in one place, all audit-ready.
If you are building or upgrading your digital asset treasury function, we can help. Book time with our team to see how it works.
