The Secret Affair Between Cryptocurrency And Companies | CoinsCapture

 

Cryptocurrency has recently become a popular endeavor because of its price rallies. Many large corporations like Tesla, MicroStrategy, and Square are adopting or investing in Cryptocurrency. These top companies openly announce and talk about their involvement in Cryptocurrency. Whereas, many companies are also working on building Blockchain or Cryptocurrency.

But there is more than meets the eyes. Yes, we are talking about the ones that prefer keeping themselves in a disguise shadow. The tricks that made the news during the events of the Panama Papers and Paradise Papers. These companies are similarly holding Cryptocurrencies secretly through various methods, techniques, and strategies in an attempt to not fall on the radar. Their theory works on placing Cryptocurrency investments without a shred of evidence on their company’s balance sheet.

Such scenarios give rise to the greys of black and white, resulting in questions and doubts. Why the need for subterfuge? How are the people involved in making this happen? How does it work? Are the board members aware? Is this legit?

In this blog, we are going to discuss, The Secret Affair Between Cryptocurrency And Companies

Cryptocurrencies like Bitcoin are popularly known for being a hedge against inflation, their potential debasement of fiat, and store of value. Everyone wants to have a piece of Cryptocurrency.

The corporate CFOs and Finance executives have been painstakingly working to find ways to acquire and allocate Cryptocurrency. Many firms unbeknownst to their shareholders have been accumulating Cryptocurrencies by trying not to attract regulatory scrutiny.

Also Read, 10 Public Companies With Huge Bitcoin Portfolios

These firms use the complex web offshore holding companies, trusts, or the web of corporate shell companies. This web of companies that hold the Crypto appears on a single-line entry in the accounting statements. Many make rare or no movements of their cold wallets, which makes it even more challenging to determine the wallet addresses controlled by the company. Thus, the arrangers of the Cryptocurrencies diligently ensure the provenance and transaction noise with the obfuscation tricks in a convoluted web manner. Many large companies use this method to manage tax exposure, which is later simply processed through various money laundering techniques like “smurfing”. Since Cryptocurrencies are pseudonymous, the above strategies makes it difficult or almost impossible to track or string the beneficial owner of the Cryptocurrency.

But why the need for the hide and seek when so many large corporations are openly announcing their involvements in Cryptocurrency?

The first Cryptocurrency - Bitcoin, was introduced in 2009, and now there are over 5000 Cryptos in the market. However, even if Cryptocurrency has been in the market for more than a decade; it’s not yet quite mainstream. Cryptocurrency has not secured a decent institutional investing record; moreover, they are unregulated. It has various challenges involved, such as security, operations, legal and regulatory risks. Since there is no regulatory framework or legislation involved, many investors have concerns about their firm investing in Crypto without facing any hurdles from the market or the board in the future. It would only mean to put their necks out and call out the risks.

The progressive nascent state can be described for top Cryptocurrencies like Bitcoin, Ethereum, Litecoin, and few others amongst all the Cryptos in the market. Declaring that they have invested in Cryptocurrency on the company’s balance sheet would not only attract attention but will have to tread a fine line. This could also risk the firm’s interest and shares.

Also Read, 8 Ways To Buy Bitcoin Without ID And Stay Anonymous

So why take the risk?

Imagine 5 years from now Cryptocurrency becomes the ultimate yielding investment, and then the board hauls asking why did you not buy when you had the chance? Confusing, isn’t it? I mean should you risk being fired for investing in Cryptocurrency, or risk being fired for not investing? That’s pretty much being caught between a rock and a hard place.

Many analysts have suggested investing 1% to 5% of the assets in Cryptocurrency. Extensive and in-depth research and study, risk management, timely execution, shares allocation, capital allocation,  governance are conducted when planning and executing the Crypto investment.

Maybe someday, in the long haul, Cryptocurrency will be spoken about in the black-tie events and will be discussed in the general meetings as a hallmark. But one has to wait for the day and be prepared with deliverance. When this day comes, we are sure that all these private corporates with dark secrets will have a parade of limelight showcasing their corporate balance sheets. Until that day comes, these very balance sheets will never see the light of day!

Disclaimer: The author’s views and opinions are for informational purposes only and do not constitute financial, investment, or other advice.