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Key takeawaysProperly accounting for crypto assets on your balance sheet is essential for accurate tax reporting and financial transparency.Crypto trading activities should be recorded like stock trading, at fair market value on the day of purchase.In some countries, like the US, crypto losses can offset gains, so keeping track of gains and losses is important for reducing taxable income.Whether you’re an individual investor or a business, treating cryptocurrencies as assets and documenting them ensures compliance with tax laws and minimizes the risk of errors.

Let’s be real, it’s easy to lose sight of what you’ve actually gained or lost, especially when it comes to crypto and its market volatility and frequent trading activities. 

And when it comes to accounting, especially in countries like the United States, it gets trickier because you must reflect those numbers properly on your balance sheet. 

If you are running a business that involves crypto or you are just a crypto investor, understanding how to account for your digital assets correctly is crucial. 

This guide breaks down the basics of balance sheets, handling crypto gains and losses, and what tax implications you need to account for.

What is a balance sheet, and why is it needed?

Think of a balance sheet as a report of your financial health. It shows what you own, owe and what’s left over at a specific point in time. It contains three main parts: 

Opinion by: Markus Levin, co-founder of XYO

The crypto community often experiences periods of heightened anxiety. Market downturns are often triggered by counterproductive sentiment-driven events rather than by fundamental issues, creating a significant disconnect between price behavior and the actual progress being made within the industry by the companies within it. What often goes unnoticed is how much real development happens during these downturns. While market movements capture most of the attention, teams are building faster and more deliberately behind the scenes than ever. The focus shifts away from price speculation and toward real execution. Growth happens during downturns. It's a necessary phase for projects that thrive in a volatile industry. They re-focus attention on refining their technology and business, fueling the next wave of progress.

As a result, there's a disconnect between online sentiment and conversations between blockchain industry leaders. For builders and project leaders, the atmosphere is of determination, not doom.

Regulators are coming on board

One of the most promising developments is the accelerating momentum of regulation policy. Many European companies are applying for MiCA licenses in preparation for regulatory updates. There's also a significant policy shift under new US leadership as the SEC retreats from several high-profile crypto enforcement actions. 

The disparity between sentiment and reality serves as a reminder that price is a lagging indicator. Selloffs are triggered by uncertainty around tariff announcements and background activity such as interest rates. Material, long-term statistics speak for the virtually universal optimism among industry leaders as the number of active developers has remained stable, and the number of established developers almost doubled last year. That's an incredible jump in only one year. 

Key points:

Bitcoin and gold move higher in step amid jitters over Japan’s debt problem reach “boiling point.”

$108,000 remains a keen target for Bitcoin bulls amid ongoing corporate buying.

Some still see the current BTC price uptrend coming to an abrupt end.

Bitcoin (BTC) kept up pressure on $108,000 at the May 21 Wall Street open as a trader flagged multiple bearish divergences.

Guatemala’s largest bank, Banco Industrial, has integrated crypto infrastructure provider SukuPay into its mobile banking app, allowing locals to more easily receive remittances powered by blockchain technology. 

SukuPay’s infrastructure has been fully embedded inside the Zigi payment app, allowing Guatemalans to receive funds from the United States instantly for a $0.99 flat fee, the company disclosed on May 21. 

Users of the Zigi app do not need a crypto wallet or an International Bank Account Number (IBAN) to receive the funds, the company said. 

SukuPay CEO Yonathan Lapchik told Cointelegraph that the “key to mainstream adoption of blockchain technology is making it invisible to the end-user” so that there are no technical barriers. 

“That’s the only way we’ll scale blockchain to billions of people — by building the rails, not forcing people to learn how they work,” said Lapchik.

Hong Kong’s Legislative Council passed the Stablecoin Bill, paving the way for a regulated framework that could position the region as a global leader in digital assets and Web3 development.

In a May 21 post on X, Legislative Council member Johnny Ng Kit-Chong said the bill had passed its third reading, clearing the final hurdle for adoption.

“It is expected that by the end of this year, major institutions will be able to apply to the Hong Kong Monetary Authority to become licensed stablecoin issuers,” Ng said.

According to the new Hong Kong legislation, stablecoins must be backed by fiat currency as underlying assets. Ng said Hong Kong is welcoming “global enterprises and institutions interested in issuing stablecoins to apply in Hong Kong,” offering to personally assist with introductions and collaboration:

Related: Hong Kong introduces crypto staking rules, reaffirms Web3 commitment

Yield-bearing stablecoins have soared to $11 billion in circulation, representing 4.5% of the total stablecoin market, a steep climb from just $1.5 billion and a 1% market share at the start of 2024.

One of the biggest winners is Pendle, a decentralized protocol that enables users to lock in fixed yields or speculate on variable interest rates. Pendle now accounts for 30% of all yield-bearing stablecoin total value locked (TVL), roughly $3 billion, the firm said in a report shared with Cointelegraph.  

Pendle noted that stablecoins make up 83% of its $4 billion total value locked, a sharp rise from less than 20% just a year ago. In contrast, assets such as Ether (ETH), which historically contributed 80%–90% of Pendle’s TVL, have shrunk to less than 10%.

Traditional stablecoins like USDt (USDT) and USDC (USDC) do not pass on interest to holders. With over $200 billion in circulation and US Federal Reserve interest rates at 4.3%, Pendle estimates that stablecoin holders are missing out on more than $9 billion in annual yield.

Related: How to Use tsUSDe on TON for Passive dollar Yield in 2025

Abu Dhabi-based Bold Technologies, a subsidiary of conglomerate Bold Holdings, has partnered with international artificial intelligence company My Aion to launch a $2.5 billion smart-city initiative aimed at transforming urban infrastructure through AI.

The companies announced the development of a platform called Aion Sentia Cognitive City, which manages complex urban systems. The platform will be powered by Maia, an AI core engine developed by My Aion, and aims to optimize and manage systems across mobility, energy, education, healthcare and digital services. 

My Aion CEO Daniele Marinelli said the AI will know the user well enough to “recommend the perfect place for your anniversary dinner and book it for you without you lifting a finger.”

The project will debut in Abu Dhabi before expanding internationally. It is expected to launch in 18 months. 

Multibillion-dollar AI project to create jobs for UAE nationals

The project is structured under a $2.5 billion Build-Operate-Transfer (BOT) model, a public-private partnership model for large-scale infrastructure and technology projects. 

Bitcoin Suisse secured an in-principle approval (IPA) from the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM), marking a major step in the Swiss crypto firm’s expansion beyond the European Union.

The Swiss crypto financial service provider received the in-principle approval through its subsidiary BTCS (Middle East), according to a May 21 news release.

The IPA is a precursor to a full financial services license, which would allow Bitcoin Suisse to provide regulated crypto financial services such as digital asset trading, crypto securities and derivatives offerings, as well as custody solutions.

The approval reflects the firm’s “strong commitment to maintaining the highest standards of transparency, security, and regulatory compliance,” according to Ceyda Majcen, head of global expansion and designated senior executive officer of BTCS (Middle East).

“Abu Dhabi, one of the Middle East’s fastest-growing financial centers, presents a compelling opportunity for growth. We look forward to working closely with the FSRA to obtain our full license,” Majcen wrote in a May 21 X announcement.

Mobile-first crypto exchange and payment platform Crypto.com secured a license allowing it to offer cryptocurrency financial derivatives in the European Economic Area.

According to a May 21 announcement, Crypto.com secured a Markets in Financial Instruments Directive (MiFID) license.

“We have already expanded our brand presence in Europe since receiving our MiCA licence and we now look forward to providing customers across the region even more ways to engage with our platform through these new offerings,” said Crypto.com’s co-founder and CEO, Kris Marszalek.

The announcement followed Crypto.com receiving in-principle approval to operate across the European Union under a Markets in Crypto-Assets (MiCA) license in mid-January. The company received regulatory approval for its acquisition of Cyprus-based trading services firm A.N. Allnew Investments from the Cyprus Securities and Exchange Commission (CySEC).

Crypto.com did not immediately respond to Cointelegraph’s request for comment.

Key points:

Bitcoin tags $108,000 for the first time since the day of its current all-time highs in January.

Traders and analysts mention support extending toward $90,000, but the probability of a retest is fading.

Near-term upside targets include a “blow-off top” at $128,000.

Bitcoin (BTC) spiked to more than $108,000 on May 21, marking new four-month highs. Where will BTC/USD go next?

United States Securities and Exchange Commission (SEC) Commissioner Hester Peirce said many non-fungible tokens (NFTs), including those with mechanisms to pay creator royalties, likely fall outside the purview of federal securities laws.

In a recent speech, Peirce said NFTs that allow artists to earn resale revenue do not automatically qualify as securities. Unlike stocks, NFTs are programmable assets that distribute proceeds to developers or artists. The SEC official said that mirrors how streaming platforms compensate musicians and filmmakers. 

“Just as streaming platforms pay royalties to the creator of a song or video each time a user plays it, an NFT can enable artists to benefit from the appreciation in the value of their work after its initial sale,” Peirce said. 

Peirce added that the feature does not provide NFT owners any rights or interest in any business enterprise or profits “traditionally associated with securities.”

SEC never prohibited NFT royalties

Oscar Franklin Tan, chief legal officer of Enjin core contributor Atlas Development Services, told Cointelegraph that the recent remarks by Peirce on NFTs and creator royalties have been widely misunderstood. 

South Korea is tightening rules around digital asset transactions as it prepares to allow institutional players into its crypto market, introducing new guidelines for nonprofit crypto sales and stricter listing standards for exchanges.

On May 20, the Financial Services Commission (FSC) of South Korea said during its fourth Virtual Asset Committee meeting that it had finalized sweeping new measures.

Set to take effect in June, the updated rules allow both nonprofit organizations and virtual asset exchanges to sell cryptocurrencies, but under new compliance standards.

Nonprofit entities must have at least five years of audited financial history to be permitted to receive and sell virtual asset donations. They will also need to establish internal Donation Review Committees to assess the appropriateness of each donation and the liquidation strategy.

To reduce risks of money laundering, all donations must be routed through verified Korean won exchange accounts, with verification responsibilities placed on banks, exchanges and the nonprofits themselves.

Amsterdam-based Theta Capital Management raised over $175 million for its latest fund-of-funds, aimed at supporting early-stage blockchain startups through specialized venture capital (VC) firms.

The new vehicle, Theta Blockchain Ventures IV, will channel capital into crypto-native VC firms with a track record of backing blockchain innovation, Theta’s managing partner and chief investment officer Ruud Smets told Bloomberg.

Smets said the strategy focuses on specialist managers who can outperform generalist investors in the earliest funding rounds.

“We’ve always been looking for areas where specialization and active management provide a sustainable edge,” Smets noted. He said that the experience and positioning of dedicated crypto VCs “has compounded over time,” creating barriers for less focused investors trying to enter the space.

Founded in 2001, Theta shifted its focus to digital assets in 2018 and now manages about $1.2 billion. The firm has backed leading crypto investment names such as Polychain Capital, CoinFund and Castle Island Ventures.

The US Securities and Exchange Commission has delayed its decision on Bitwise’s application to add staking to its Ether exchange-traded fund and on Grayscale’s XRP ETF bid, which analysts had expected.

The SEC said on May 20 that it needed to extend its decision on Bitwise’s application by 45 days to “consider the proposed rule change and the issues raised therein.” The agency needed to either decide or punt its decision by May 22.

The agency also delayed deciding on Grayscale’s XRP (XRP) tracking ETF and Bitwise’s Solana (SOL) tracking fund while it seeks public comments and begins “proceedings to allow for additional analysis” of the proposals to ensure they meet regulatory standards.

Bloomberg ETF analyst James Seyffart said on X that both delays were expected because the SEC “typically takes the full time to respond to a 19b-4 filing.”

“Almost all of these filings have final due dates in October,” and an early decision would be “out of the norm,” Seyffart added. 

Shareholders of the healthcare services provider KindlyMD, Inc have approved a proposed merger with Bitcoin holding company Nakamoto Holdings, founded by US President Donald Trump’s crypto adviser, David Bailey.

KindlyMD and Nakamoto Holdings, a newly formed company that focuses on creating a network of Bitcoin-related entities, will both file information statements with the Securities and Exchange Commission, KindlyMD said in a May 20 statement.

The merger is expected to take place 20 days after both companies have shared the information statement with KindlyMD’s shareholders, with the transaction expected to be finalized in the third quarter of 2025.

Google Finance shows shares in KindlyMD (KDLY) closed the May 20 trading session up 9% at $15.22 and gained another 4.8% after the bell as the announcement of the approved merger came after the trading session ended. KDLY is up over 979% so far this year.

The companies first announced the merger on May 12, saying the merged entity will use equity, debt, and other offerings to develop a slew of Bitcoin-native companies. Additionally, the company will also bolster its treasury by accumulating Bitcoin (BTC).

Blackstone, which bills itself as the “the world’s largest alternative asset manager,” disclosed its first-ever crypto-related purchase, buying shares in BlackRock’s spot Bitcoin exchange-traded fund.

However, Blackstone’s investment, reported in a May 20 filing with the US Securities and Exchange Commission, only totaled around $1.08 million — a fraction of the asset manager’s $1.2 trillion portfolio.

Blackstone reported holding 23,094 shares of BlackRock’s iShares Bitcoin Trust ETF (IBIT) as of March 31.

The IBIT shares were added to Blackstone’s Alternative Multi-Strategy Fund (BTMIX), which holds $2.63 billion worth of assets, Google Finance data shows.

The filing shows Blackstone also bought 4,300 shares in crypto ATM operator Bitcoin Depot Inc. (BTM) for a total cost of $6,300 and spent $181,166 scooping up 9,889 shares of the ProShares Bitcoin ETF (BITO).

Despite its claim as an “alternative asset manager,” Blackstone has largely stayed away from crypto. In September 2019, Blackstone CEO Steve Schwarzman said he liked the concept of blockchain but thought its use for money was “pretty odd.”

Haliey Welch, better known as the “Hawk tuah girl,” says the Federal Bureau of Investigation briefly probed her after her “memecoin disaster” — the failed launch of a token in her image that she promoted. 

Welch said in a May 21 episode of her “Talk Tuah” podcast that the FBI showed up at her grandmother’s house looking to speak to her over the Hawk Tuah (HAWK) crypto token, which many crypto commentators have called an exit scam.

Welch said she handed over her phone to the FBI and met with agents who “interrogated me, asking me questions and everything else related to crypto.”

“They cleared me, I was good to go,” Welch said. 

Welch went viral for her response about an oral sex technique in a vox pop interview posted to YouTube in June. 

New York City Mayor Eric Adams says he will create a digital advisory council to attract jobs and investment to the Big Apple and position it as the “crypto capital of the globe.”

“This is not about chasing memes or trends,” Adams told the inaugural New York City Crypto Summit on May 20. “We want to use the technology of tomorrow to better serve New Yorkers today.”

“We have experts right here, and they are going to help us navigate solutions that serve our city,” he added. “The age of tokenization, which includes crypto and blockchain and other fintech innovations, that age is here, and we’re going to continue to move forward with it.”

Adams didn’t share further details on the advisory group, but said a council chair and key policy recommendations would follow in the next few weeks.

We're taking the next step in becoming the Crypto Capitol of the WORLD, hosting our city's first-ever Crypto and Digital Assets Summit! Join us LIVE as we get started: https://t.co/iwO6ThkaSB

Update May 21, 4:32 am UTC: This article has been updated to add more information from the SEC’s complaint.

The US Securities and Exchange Commission has sued crypto investment platform Unicoin and three of its executives, alleging they made false and misleading statements about their crypto assets that raised over $100 million from investors.

The SEC said on May 20 that it charged Unicoin CEO Alex Konanykhin, board member Silvina Moschini and former investment chief Alex Dominguez with misleading over 5,000 investors about certificates that conveyed rights to receive Unicoin tokens and stock.

SEC Division of Enforcement associate director Mark Cave claimed that starting in 2022, the trio “exploited thousands of investors with fictitious promises that its tokens, when issued, would be backed by real-world assets including an international portfolio of valuable real estate holdings.”

“The real estate assets were worth a mere fraction of what the company claimed, and the majority of the company’s sales of rights certificates were illusory,” Cave added.