The professionals at Aimlon CPA P.C.
provide tax and accounting insights for an informed crypto assets related decision making.
Aimlon CPA P.C. tax and accounting professionals help your organization’s crypto assets team make better business decisions. We keep you informed of new crypto assets (i) related tax and accounting developments in France and in the United States of America.
Crypto assets contribute to finance innovation. For instance, for some organizations, crypto assets may be a simple, effective and powerful way to raise much needed money to finance their activity. They may:
- Issue securities tokens that represent ownership rights or assets value transferred to a blockchain token. The transfer information is entered in the blockchain and is stored within the blockchain. A randomly generated value is assigned to the information thus stored;
- Use utility tokens as a means of exchange. As a utility token investor, you do not acquire any ownership stake in the project being invested in. Your investment simply allows you to buy or sell the underlying tokens on a preferential basis;
- Use the currency tokens as a payment method on the crypto currency’s peer-to-peer network. For instance, your organization may use Bitcoin as a payment method on Bitcoin’s peer-to-peer network.
Case study No. 1
You’re a nonprofit organization that is soliciting charitable contributions. A potential donor pledges crypto assets. You were wondering how that would work.
Our assistance: You may accept a donation of crypto assets. Like any other properties that they usually receive, nonprofit organizations may receive crypo assets contributions. However, we’d suggest you do your homework: know the donor and if possible know the origin of the crypto assets donated.
Case study No. 2
You’re pitching investors to raise additional funds to grow your business. A would- be investor likes what you’re doing and offers to contribute crypto assets to your company for a stake of ownership. You were wondering what that would entail.
Our assistance: The investor will credit the crypto assets to your organization’s crypto wallet. If you raise debt (convertible or non convertible), the investor will receive copy of an executed loan agreement in exchange for the investment. If you raise equity, the investor will receive stocks in exchange for the crypto assets. You may convert part of the crypto asset to fiat currency (euro, U.S. dollars, etc.) to pay for your operating expenses.
The crypto assets market is a global market of an estimated $1 trillion. And more and more businesses are investing in the cryptocurrency market. Cryptocurrency is a category of crypto assets. For instance, worldwide, blockchain enterprises use and invest in crypto assets. Their investment portfolio is composed of 30% of crypto assets such as Bitcoin, Ether, 24% of stable coins, 19% of NFT, 8% of security tokens.
The crypto asset Bitcoin was designed to be a digital currency for peer-to-peer exchange. The objective was to use it as an alternative method of payment. Ethereum is a crypto asset that has the capabilities to execute a pre-determined agreement once certain conditions are reached. It is therefore used to secure the execution of “smart contracts”. Ether is a cryptocurrency for Ethereal apps that you can use on the internet. Stable coins are crypto assets that are pegged to a stable currency such as the U.S. dollars or the Euro. That helps reduce their volatility relative to unpegged crypto assets such as Bitcoin. NFTs represent digital proof of ownership of any given items such as artworks, real estate, music, or videos. NFTs are not interchangeable: each token has unique properties and different values compared to other similar tokens.