Accounting firm KPMG doubles down on crypto; buys Bitcoin, Ethereum for its corporate treasury

One of the big four accounting companies – KPMG is among the latest top corporates in the world to get into cryptocurrency investments. The company in a statement announced that its Canadian business has completed an allocation of cryptoassets to its corporate treasury. This is the firm’s first direct investment in cryptoassets. However, it didn’t disclose the investment amount.

KPMG Canada said it has made investments in Bitcoin and Ethereum, and carbon offsets as well to deliver on its stated environmental, social and governance (ESG) commitments. Carbon offsets are activities to compensate for the carbon emissions or other greenhouse gases by providing for an emission reduction occurring elsewhere.

Benjie Thomas, Canadian Managing Partner, Advisory Services at KPMG in Canada said in the statement on Monday that the investment reflects the company’s belief that institutional adoption of cryptoassets and blockchain technology will continue to grow and become a regular part of the asset mix. “Cryptoassets are a maturing asset class…Investors such as hedge funds and family offices to large insurers and pension funds are increasingly gaining exposure to cryptoassets, and traditional financial services such as banks, financial advisors and brokerages are exploring offering products and services involving cryptoassets,” said Thomas. 

Also read: Tesla held $2 billion in Bitcoin as of Dec 2021; $101m impairment loss due to price volatility: SEC filing

“In the recent past, KPMG invested in cryptocurrencies and they have expanded their business portfolio with technologies and finance practices. KPMG acknowledged the high interest received by Bitcoin since 2020. The crypto industry continues to grow and expand and it needs to be integrated by financial services and institutional investors,” Kumar Gaurav, Founder & CEO at neo-bank for crypto industry Cashaa told Financial Express Online.

KPMG had also established a governance committee including stakeholders from finance, risk management, advisory, audit and tax to provide oversight and approve its treasury allocation. The committee “undertook and completed a rigorous risk assessment process that included a review of regulatory, reputational, and custodial risks. KPMG specialists also assessed the tax and accounting implications of the transaction,” the company said. 

The investment reflects the supportive crypto regulations in the country. Currently, there is no official ban on cryptocurrencies in Canada. Digital currencies are considered as a commodity–capital assets such as rental property or stock instead of legal tender. The crypto income may be subject to income tax or capital gains tax in Canada. The income tax rate ranges from 15 per cent to 33 per cent depending on the taxable income.

KPMG already has a presence in blockchain services. It assists financial service firms to identify effective use cases to derive maximum blockchain benefit. In November 2020, KPMG had introduced its Cryptoasset Framework comprising of key capabilities required for a crypto business towards strategy, technology, operations, cybersecurity, risk management, finance and compliance.

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“The cryptoasset industry continues to grow and mature and it needs to be considered by financial services and institutional investors,” said Kareem Sadek, Advisory Partner, Cryptoassets and Blockchain Services co-leader, KPMG in Canada. “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,” he added.

Currently, nearly 40 public companies in the world own bitcoin. The top 10 included MicroStrategy, Tesla, Galaxy Digital Holdings, Voyager Digital, Marathon Digital Holdings, Square, Hut 8 Mining Corp, Core Scientific, Riot Blockchain, and Bitfarms, as per buybitcoinworldwide.com