Mark Eckerle, a Partner at Withum specializing in digital assets and blockchain, shares his journey and insights into this evolving field. He discusses Withum's pivotal role in supporting digital asset clients and the significant rise of stablecoins. Mark highlights how startups can strategically navigate tax and audit challenges, and the importance of integrating cryptocurrency into business operations. He also explores the trend of tokenization and its potential to transform traditional finance by connecting it with innovative blockchain solutions.
Withum has strategically positioned itself in the digital asset sector by providing comprehensive audit, advisory, and tax services tailored for blockchain clients.
The rise of stablecoins is impacting corporate operations, leading to increased adoption among businesses as regulatory clarity improves and transactions become more stable.
Deep dives
Witham's Digital Asset Practice and Growth
Witham has established itself as a significant player in the digital asset sector by developing a comprehensive suite of services that includes audit, advisory, and tax functions. This has been beneficial for various clients, particularly in the blockchain space, as the firm has helped navigate complexities in this evolving industry. With a dedicated digital asset practice launched in 2018, Witham capitalized on its early engagement with clients, providing services such as cybersecurity solutions, valuation, and outsourced accounting. Their proactive approach has allowed them to create a strong market presence, underscored by involvement in key projects like the first SEC-approved ICO and the initial stablecoin attestation.
Engagement with Startups and Tax Strategies
Witham specializes in assisting early-stage companies, understanding their need for flexible accounting and tax services as they scale. They support startups at various stages, from pre-seed to mature firms, emphasizing the necessity of annual corporate tax returns and tax-saving strategies. The firm integrates specialists as needed for areas including R&D tax credits and valuations, providing tailored advice to help founders focus on growth rather than administrative burdens. By adopting a hands-on approach, Witham ensures that clients have constant access to knowledgeable resources without additional costs, fostering a partnership that evolves with the client's needs.
Challenges in Accepting Cryptocurrency Payments
Businesses increasingly face challenges when introducing cryptocurrency payments, leading to a need for proper guidance on how to manage these transactions securely. Witham experienced this firsthand by working with clients interested in receiving payments in cryptocurrencies like Ethereum, and thus they established protocols for accepting and converting such assets. They help companies set up wallets and implement necessary security controls to mitigate risks associated with digital transactions, ensuring clients understand the fundamental differences between crypto and traditional banking. Moreover, Witham emphasizes the importance of using reliable platforms for transaction processing, reinforcing the need for robust internal controls to prevent errors.
The Emergence of Stablecoins and Future Predictions
The rise of stablecoins has reshaped the landscape for digital assets, providing a more stable alternative for transactions and gaining traction among non-crypto companies looking to innovate. Witham's involvement in developing stablecoin practices and reporting standards speaks to their strategic foresight in this growing sector. As regulatory clarity improves, particularly with recent guidelines, more corporations are expected to adopt stablecoins for payments and even hold them on their balance sheets. Witham predicts that the tokenization of real-world assets will be the key driver for digital asset adoption, leading to a broader understanding and acceptance of blockchain technology across various industries.