KPMG Canada Adds Bitcoin, Ethereum to Balance Sheet

Key Takeaways

  • KPMG Canada has invested in Bitcoin and Ethereum.
  • The firm cited its commitment to innovative technologies and asset classes.
  • The accounting firm did, however, take measures to offset the carbon footprint of the Bitcoin and Ethereum transaction.

Share this article

KPMG Canada has added Bitcoin and Ethereum to its corporate treasury. This is the first time the firm has invested directly in cryptocurrencies. 

KPMG Canada Wades Into Crypto

KPMG Canada, a member company of KPMG International, Ltd., has bought both Bitcoin and Ethereum.

KPMG Canada, one of the nation’s largest employers, has added the two largest cryptocurrencies to its balance sheet. The firm cited its commitment to emerging technologies and asset classes as reasons for its allocation. 

As part of KPMG Canada’s environmental, social, and governance (ESG) commitments, the audit, tax, and advisory firm emphasized that its investments included “carbon offsets” in an effort to achieve net-zero carbon transactions. In fact, a governance committee for the cryptocurrency allocation was established to these ends, where “rigorous risk assessment” processes were carried out to review possible regulatory or reputational risks. Tax and accounting implications were also considered.

In addition to its Bitcoin and Ethereum allocations, the firm has further plans related to digital assets and technologies. According to Kareem Sadek, Advisory Partner and co-leader of Cryptoassets and Blockchain Services:

“We’ve invested in a strong cryptoassets practice and we will continue to enhance and build on our capabilities across Decentralized Finance (DeFi), Non-Fungible Tokens (NFTs), and the Metaverse, to name a few. We expect to see a lot of growth in these areas in the years to come.” 

Echoing this pro-growth sentiment for the crypto space, Canadian Managing Partner, Advisory Services, Benjie Thomas, expressed that the firm’s allocation to Bitcoin and Ethereum was a reflection of the firm’s “belief that institutional adoption of cryptoassets and blockchain technology will continue to grow and become a regular part of the asset mix.” 

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies. 

Share this article


Tagged : / / / / / / / / /

Treasury Weighs In on NFTs and Art Crime

Key Takeaways

  • The U.S. Treasury warned today that the NFT art market is susceptible to money laundering and other types of fraud.
  • It also suggested that some (but not all) NFTs can be considered virtual assets under Financial Action Task Force rules.
  • The Treasury did not directly comment on other issues in the NFT sector, such as plagiarism and phishing.

Share this article

Wikipedia may not consider NFTs to be art, but the U.S. Treasury apparently does, and it has observed their role in art-related crime.

Treasury Warns of Money Laundering

The U.S. Treasury acknowledged NFT-based art today, focusing on money laundering and possible regulation of the sector.

The Department of the Treasury published a press release and report on illicit finance in high-value art markets, in which it took particular note of the emerging NFT sector and its capacity for money laundering.

The Treasury specifically warned that NFTs can be used in self-laundering, a practice in which users spend funds on an NFT that they already own in order to create obfuscated transaction trails on the blockchain.

This sort of money laundering was one explanation offered when a CryptoPunk NFT was sold for more than $500 million in October 2021.

The Treasury additionally warned that the NFT market currently lacks of standard and due diligence and no central body. It argued that this can “create perverse incentives,” as automated and rapid NFTs sales can encourage money laundering. It noted that, by contrast, experts in the traditional art and auction industries tend to conduct their business much more carefully, with several institutional safeguards in place.

Further, the Treasury expressed the concern that “the incentive to transact can potentially be higher than the incentive to verify the identity of the buyer of the work.”

The Treasury did not directly address the issue of NFTs based on plagiarized media, which has been a growing issue. Nor did it address phishing scams, another frequent problem for NFT owners.

NFTs Could Fall Under VASP Rules

The Treasury observed that NFTs have moved a significant amount of value recently. It said that NFTs saw $1.5 billion in trading volume in Q1 2021—a 2,627% increase over the last quarter.

The government body also noted that NFTs that are used for payments and investments could be defined as virtual assets. As such, companies that create or transact NFTs could be considered a Virtual Asset Service Provider (VASP) and subject to regulation under Financial Action Task Force (FATF) rules.

It added that NFT platforms such as Dapper Labs, SuperRare, OpenSea, and art houses could fall under these rules “depending on the nature and characteristics of the NFTs offered.”

The Treasury also acknowledged that NFTs that primarily serve as collectibles “are generally not considered to be virtual assets.”

Guidance released by the FATF last October similarly suggested that NFTs could be considered virtual assets if they are used for payments, but otherwise fall outside that definition.

Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.

Share this article


Tagged : / / / /

Ethereum options data shows pro traders expect strong resistance at $3,600

Ether (ETH) price has bounced 13% from its Jan. 9 low at $2,950, but it seems premature to call the move a cycle bottom. Instead, the larger bearish movement has prevailed and although it looks primarily correlated to Bitcoin (BTC) price, regulatory concerns and a tighter United States Federal Reserve policy have also been blamed for the movement.

BTC and Ether have been under pressure since regulators focused their attention on stablecoins. On Nov. 1, the U.S. Treasury Department urged Congress to ensure that stablecoin issuers are regulated similarly to U.S. banks.

ETH/USD price at FTX. Source: TradingView

Currently, the descending channel formation initiated in mid-November shows resistance at $3,850 resistance. The average network transaction fees have also risen back above $50 and the longer that the Ethereum 2.0 upgrade takes to occur, the better the situation will be for competing chains.

Regardless of the rationale behind Ether’s 28% price drop over the past six weeks, bulls missed the opportunity to secure a $300 million profit in the Jan. 14 weekly options expiry. Unfortunately for them, this $4,500 and higher scenario seems unfeasible at the moment.

Ether options aggregate open interest for Jan. 14. Source:

The call-to-put ratio shows an 89% advantage for bulls because the $380 million call (buy) instruments have a larger open interest versus the $200 million put (sell) options. The current 1.89 measure is deceptive because the recent Ether price drop caused most of the bullish bets to become worthless.

For example, if Ether’s price remains below $3,300 at 8:00 am UTC on Jan. 14, only $24 million worth of these call (buy) options will be available, but there is no value in having the right to buy Ether at $3,300 if it is trading below that price.

Related: Cointelegraph Consulting – A look at Terra’s ecosystem

Bears need ETH price below $3,300 to secure a $65 million profit

Below are the three most likely scenarios based on the current price action. The number of option contracts available on Jan. 14 for bulls (call) and bear (put) instruments vary depending on the expiry ETH price. The imbalance favoring each side constitutes the theoretical profit:

  • Between $3,100 and $3,300: 7,400 calls vs. 27,800 puts. The net result favors bears by $65 million.
  • Between $3,300 and $3,500: 22,200 calls vs. 19,300 puts. The net result is balanced between bulls and bears.
  • Above $3,500: 32,500 calls vs. 15,600 puts. The net result is $60 million favoring the call (bull) instruments.

This crude estimate considers call options being used in bullish bets and put options exclusively in neutral-to-bearish trades. Even so, this oversimplification disregards more complex investment strategies.

For instance, a trader could have sold a put option, effectively gaining a positive exposure to Ether above a specific price. But, unfortunately, there’s no easy way to estimate this effect.

Bulls don’t stand a chance

Ether bulls would have had a decent $300 million advantage if the price held above $4,500. However, the current scenario requires a 6% positive move from $3,300 to $3,500 to generate a $60 million advantage.

Considering there are less than 12 hours until Friday’s options expiry, bulls will likely concentrate their efforts on keeping the price above $3,300 to balance out the scales.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.