Until recently, most public-company boards could dismiss corporate crypto exposure as too volatile, too complex, or too murky under U.S. accounting rules. That’s no longer true. Over the past year, regulators and standard-setters have quietly made crypto ownership far more workable for balance sheets governed by generally accepted accounting principles (GAAP). The Financial Accounting Standards Board (FASB) now requires most qualifying digital assets to be marked to fair value through earnings, the U.S. Securities and Exchange Commission (SEC) has modernized its guidance on safeguarding obligations, and U.S.-listed spot Bitcoin and Ether exchange-traded funds (ETFs) are trading with the same operational ease as any other fund.

This matters because crypto exposure is moving from the fringe into mainstream treasury and investment discussions. Chief financial officers, audit committees, and boards are now facing questions from analysts and shareholders about whether digital assets belong in a modern capital allocation strategy. Understanding the rules, the risks, and the practical options is now part of responsible corporate governance.

Public companies today have two clear paths to gain exposure. The most straightforward is through spot Bitcoin or Ether ETFs. This option avoids the operational complexities of wallets and private keys, relying instead on familiar fund structures with daily net asset value (NAV) reporting, audited financials, and broker-based trading and custody. While management teams must account for modest fund fees and the possibility of small tracking differences from spot, ETFs offer a compliant and low-friction entry point.

Holding digital coins directly on the balance sheet, a practical alternative, provides greater control over timing, counterparties, and movement of assets but introduces new disciplines. Since the adoption of Accounting Standards Update (ASU) 2023-08, mark-to-market gains and losses now flow through net income, potentially increasing earnings-per-share volatility. Companies pursuing direct holdings must secure institutional-grade custody, define explicit wallet governance outlining who can move assets and under what conditions, and maintain a documented incident response plan capable of withstanding audit scrutiny.

On the accounting front, simplicity and consistency are the priorities. Under ASU 2023-08, most qualifying crypto assets are measured at fair value with changes recognized in net income. Separate presentation and detailed roll-forward disclosures are required, supported by reliable price sources and a clearly defined principal-market policy. Month-end close procedures must be consistent and repeatable. Early engagement with auditors helps prevent control or valuation surprises.

For custodians, SEC Staff Accounting Bulletin (SAB) 122 changed the framework for safeguarding digital assets held for others. Entities that hold crypto on behalf of clients must determine whether a liability and related disclosure are required under existing GAAP. Companies holding only for their own account can focus instead on fair-value processes, control integrity, and transparent risk reporting.

Strong governance and communication underpin everything. Boards should formally authorize a concise treasury crypto policy that defines purpose, limits, approved venues and custodians, sign-off authority, and clear exit criteria. Wallet operations should be treated with the same rigor as cash management, i.e., level dual approvals, key-ceremony documentation, and periodic independent testing that includes recovery drills.

Disclosure discipline is essential. Management’s Discussion and Analysis (MD&A) sections in the applicable periodic filings should explain potential earnings volatility from fair-value marks, liquidity considerations such as settlement timing or collateral requirements, and operational risks tied to custody, cyber threats, and evolving regulation. Any material first allocation or strategic shift should be treated as a material event, prompting consistent messaging and compliant disclosures across Form 8-K filings, earnings calls, and investor communications.

Companies must also be mindful of the Investment Company Act’s “40%test.” Accumulating investment securities, including equity in crypto firms or tokenized instruments, equal to 40%or more of unconsolidated assets could inadvertently classify a firm as an investment company under the Investment Company Act of 1940. While Bitcoin and Ether are generally treated as commodities and thus typically do not fall within the definition of securities, while many other tokens may, based on the facts and circumstances. Continuous monitoring and contemporaneous documentation are vital.

Tax treatment adds another layer of complexity. The U.S. Internal Revenue Service (IRS) continues to view crypto as property rather than currency, meaning that book and tax timing will diverge. Fair-value changes will appear immediately in financial statements, while taxable gains or losses are recognized only upon sale. Deferred taxes, basis tracking, and state-level implications all warrant careful planning.

Before moving forward, every company should define its rationale for exposure and set explicit position limits, whether strategic reserve, diversification, or another objective. Leadership teams need to decide between ETF and direct ownership models, select a qualified custodian, and ensure that valuation, close, and control processes integrate seamlessly with existing financial systems. Internal control frameworks, disclosure controls, and auditor coordination should be updated in advance. If the company later adds crypto-related securities, monitoring for Investment Company Act implications and maintaining liquidity and tax discipline are essential.

Corporate crypto exposure has finally reached the point where it can be executed with the same rigor expected of any treasury or investment decision. The framework is mature: fair-value accounting is in place, ETF access is straightforward, and safeguarding expectations are clear. But success depends on public-company hygiene, including tight controls, board-level policy, and transparent disclosure. The first allocation should be treated like a financing transaction: planned, documented, and communicated precisely.