Custody, Provenance, and Reporting of Blockchain and Cryptoassets

Abstract

Abstract Although few fully understand the evolving science of blockchain technology, many agree that such technology promises countless crypto innovative applications. However, institutions using blockchain and cryptoassets face issues. Since more institutions are beginning to explore various private, public, and hybrid blockchains and their related cryptoassets, an increased need exists to understand and anticipate implementation problems. Such problems include contractual issues, privacy concerns, tax implications, jurisdictional issues, financial fraud, and data theft. Others involve intellectual property rights, money laundering, accounting and financial reporting, fork management and governance, and compliance and regulatory obligations. This chapter reviews and analyzes the various problems facing institutions in using blockchain and cryptoassets as financial instruments and mediums of exchange. It focuses on these aspects concerning custody, provenance, and reporting. This chapter also discusses the compliance, disclosure, and regulatory reporting of cryptoassets.