Web3 Accounting Alliance
Few words about the first meeting of the Web3 Accounting Alliance
Hello everyone. On November 5, 2024, I held the first meeting of the Web3 Accounting Alliance (W3AA). W3AA hosts virtual meetings of crypto accounting professionals. These small-group events facilitate discussions of issues and challenges that are at the top of crypto finance teams' minds and the agenda is shaped and driven by the participants.
At our first meeting, we met with James Ting, US Controller at Ripple, and discussed issues related to stablecoin accounting. We identified that accounting for USDT remains a point of significant argument between some practitioners. Currently, the only known to us ‘official’ stance on this question, is the position taken by Mega Matrix Group in 2023. Mega Matrix Group restated their financial statements to reclassify USDT out of the financial assets category with the following justification:
‘As Tether reserves the right under its user agreement to redeem USDT by in-kind redemptions of other assets it holds in its reserves and as Tether has held precious metals and other non-financial assets in its reserves, it does not appear that USDT meets the definition of a financial instrument under ASC 825-10-20. The Company reclassified USDT, amounting $2,300 as of March 31, 2023, from stable coins to digital assets.’
After our meeting we performed an external consultation with the AICPA Accounting and Auditing Hotline and the staff member expressed the view that USDT is appropriate to account for as financial assets. It should be noted that this is not an official position of AICPA, but an individual opinion of a staff who was helping to answer the question.
We also discussed considerations over accounting for fractional ownership rights on tokenized US treasury T-bills.
Please join us for the second Web3 Accounting Alliance (W3AA) meeting on November 27, 2024, at 4:00 PM EST (2 PM PST). If you are interested in participating in our call for crypto accounting professionals please register here.
About Ripple
Using proven crypto and blockchain technology honed over a decade, Ripple’s enterprise-grade solutions are faster, more transparent, and more cost-effective than traditional financial services. Our customers use these solutions to source crypto, facilitate instant payments, empower their treasury, engage new audiences, lower capital requirements, and drive new revenue.
Founded in 2012, Ripple's vision is to enable a world where value moves as seamlessly as information flows today—an Internet of Value. Ripple is the only enterprise blockchain company today with products in commercial use. Ripple’s global payments network includes over 300 customers across 40+ countries and six continents.