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FASB Flooded with Emails As Bitcoin Community Demands Change

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Credit: Photo by Executium on Unsplash

By Landon Manning

After MicroStrategy (MSTR), the billion-dollar software intelligence company, implored Bitcoiners to urge the Financial Accounting Standards Board (FASB) to change its regulatory policy toward Bitcoin (BTC), a wave of new appeals has been rolling in.

MicroStrategy And Bitcoin

Founded in the late 1980s, MicroStrategy began as a business intelligence and software company providing analysis for multi-billion-dollar entities like McDonald’s and DuPont, and it has since grown to hold billions of dollars in different assets itself. Recognizing the potential that Bitcoin offers, the company began investing heavily into the asset in 2020. Beginning with a $250 million cash reserves investment in Bitcoin in early August, MicroStrategy quickly built up to over $760 million in Bitcoin holdings by early December, crossing the billion-dollar threshold by the end of the year.

With its Bitcoin investments paying off so stunningly well in the past several months, CEO Michael Saylor has led the company to increase its holdings to more than $5 billion worth of Bitcoin by September 2021. In an interview with Bitcoin Magazine conducted that same month, Saylor described the complex range of roles that Bitcoin can play in an ecosystem of sophisticated financial instruments, and how its many uses in the “predator and prey” dynamic of markets can bring great success. More simply, Saylor added that “to summarize, I am more bullish than ever.”

A Regulatory Appeal

On September 15, the company made an appeal to the Financial Accounting Standards Board (FASB), asking for regulatory updates regarding companies that hold reserves of Bitcoin. Under the current regulatory regime, Bitcoin is generally counted as an “intangible asset,” which means, among other things, that its value on balance sheets can depreciate if Bitcoin takes a hit, but it will not be marked up regardless of how far the price of the cryptocurrency soars. Naturally, with the value of the cryptocurrency doing so well, this inconvenience for corporate holders is not extreme, but it does represent how slow the law can be to update around Bitcoin. 

Since MicroStrategy filed this request, however, the wider cryptocurrency community has flooded the FASB with similar appeals, sending in hundreds of letters to the regulator attempting to echo this cry. Alongside individual users and various small businesses, this campaign was picked up by investment firms, an organ of the American Institute of Certified Public Accountants and even the big four accounting firms. 

Although these requests will not lead to new regulations if the FASB continues to drag its heels on the issue, this broad-based support can easily disprove one of the regulator’s old rebuttals to pro-Bitcoin measures. And regardless of how hostile or protracted this particular fight between regulators and the crypto community will be, the world of Bitcoin has been no stranger to government unfriendliness since the earliest days of its inception. A broad-based community movement backed up by a diverse range of private interests can move the ball rolling very quickly for Bitcoin, and the coin’s track record has only led to further confidence in future success.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.