Welcome to the inaugural edition of Inside Basis, our flagship newsletter where we’ll announce the latest developments in the Hash Basis universe, share relevant crypto news and give our readers practical crypto accounting tips & tricks. We’ll be dropping a line every month, so if you like this newsletter, please share with friends, colleagues and family!

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Hash Basis Beat

What’s new in the Hash Basis universe?

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FASB Firsts: Diving into Our Debut Comment Letter

We are thrilled to announce that we recently submitted a comment letter to the FASB as a part of our ongoing efforts to stay engaged with policymakers and industry stakeholders. The comment letter revolves around Subtopic 350-60, Accounting for and Disclosure of Crypto Assets (read the Exposure Draft here). The new standard proposes to switch from the current cost less impairment model to the fair value method for digital assets. It’s a monumental shift in the crypto accounting world, one that will hopefully lighten the load for crypto accountants and, more importantly, make financial reporting more relevant for companies.

Comment letters offer an opportunity for stakeholders like us to engage directly with the standard-setting process. Our feedback can address practical implications, unintended consequences, and potential improvements to the proposed standards.

Take for example question #2 from the proposal: “Is the population of crypto assets identified by the proposed scope criteria appropriate? Please explain why or why not.”

Our Response

The proposed scope criteria for digital assets is quite extensive, but there are concerns about the omission of certain types. Examples include NFTs, wrapped tokens, governance tokens (from the issuer's perspective), and liquid staking tokens. While the proposed guidance is a positive step, there is a need for more clarity on these edge cases, which require subjective judgment. Additionally, there is a suggestion to subject wrapped tokens to fair value treatment, as it can be confusing to have Ethereum at fair value while its counterpart wETH is at cost less impairment. This discrepancy may make it challenging for readers to interpret financial statements given the similarities and equivalence between ETH and wETH.

- Mackenzie Patel, CPA

Dive into our full response to the FASB here!

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We Read Crypto Twitter

(So You Don’t Have To)

Headliner news to pay attention to for crypto accounting & finance professionals

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SEC Sues Coinbase as Part of their Latest Spree of “Regulation by Enforcement”

On June 6, 2023, the U.S. Securities and Exchange Commission sued Coinbase for illegally offering securities on their platform. Although the crypto world wasn’t exactly shocked (the SEC has been hunting down crypto exchanges for a while), the news is yet another blow to crypto companies trying to operate within the US.

The SEC took to Twitter to announce their lawsuit, railing Coinbase with a pithy accusation and low quality graphic:

Brian Armstrong, CEO of Coinbase, quickly responded with a laundry list of SEC shortcomings and welcomed the scrutiny if it ultimately leads to better crypto regulations within the US:

We didn’t know a crypto CEO could be so “salty” towards a US regulatory body

Our take is that the “regulation by enforcement approach” is unproductive, if not downright scary for the crypto industry but also the US economy as a whole. What incentives do crypto companies have to stay in the US if they could be slapped with unreasonable penalties at any time? While the SEC, CFTC and Coinbase duke it out, we predict more innovation will flood out of the US and into countries like Singapore, United Kingdom, Switzerland, Bermuda, etc. Either that or the “Good Gary Gensler” meme comes true and US crypto industry is saved…

Basis Bytes

Practical tips & tricks for all the crypto accountants out there (we know, there’s like 5 of us!)

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A Spotlight on Table Capture, Our Favorite Chrome Extension

Getting data from various blockchains can be challenging due to a lack of easy-to-use data extraction options from various block explorers. These websites often do not offer features like CSV downloads of transactions, resulting in time-consuming copying and pasting during critical times like month-end close.

Enter Table Capture! This Google Chrome extension can easily grab data from the gnarliest of web tables and structure it into an accounting-friendly format. We also highly recommend getting the pro version of the extension ($12/year) since it has auto-page and auto-scroll functionality.

How we’ve used Table Capture at Hash Basis

The Casper blockchain has a notoriously unwieldy and difficult to parse block explorer (cspr.live). Casper also deposits staking rewards every two hours, which leads to a mountain of revenue data to sift through at month-end. Unfortunately for bean counters, the “staking rewards” section on their explorer also is missing a “download csv” option. Using Table Capture, we can highlight the rewards table we want data for, click the “Enable Dynamic Table Capture” button, and toggle on auto-paging. The program will hum along in the background and capture all the data you need, all while saving your wrist from carpal tunnel. See the short clip below on how to use Table Capture for this use case: