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Big Four Accounting Firm Purchased Bitcoin And Ethereum



The big development in the crypto industry yesterday was that KPMG, one of the big 4 accounting firms, announced that they have purchased bitcoin and ethereum for their corporate treasury.


There is a lot to unpack here, so let’s dig in.


KPMG is a collection of global entities that work together to provide professional services, including auditing, tax, and advisory services. The US entity is separate and distinct from the Canadian entity as an example. This is important to understand because the organization that decided to purchase bitcoin and ethereum was the Canadian entity, rather than an international holding company or every individual legal entity around the world.


It is unlikely that Canada’s openness to digital assets, especially when compared to the US regulatory environment, had too much significance here but it is still worth mentioning. The Canadian regulators have approved and supported a bitcoin spot ETF, yet the US markets are still floundering without one.

Another important detail about this decision by KPMG is that they chose to purchase both bitcoin and ethereum. The narrative around bitcoin on balance sheets has been related to inflation, protection of purchasing power, and digital sound money. Corporations haven’t been keen to purchase ethereum or any other digital assets for the most part, which usually are seen as more speculative in nature.

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KPMG explicitly stated that they made the purchase of both assets as a signal for the prospects of the industry. The press release read “the investment illustrates the firm's outlook on emerging technologies underpinned by blockchain.” But this isn’t that surprising — the crypto industry is growing rapidly and many companies need help with tax, accounting, and advisory services.


KPMG is probably making money hand-over-fist by servicing this new industry. There is information asymmetry and corporations won’t get fired for going with one of the big four accounting firms. KPMG’s ability to differentiate themselves from the other three big accounting firms is now obvious.


The most noteworthy part of this situation though isn’t about KPMG’s decision. In Bloomberg’s coverage of the purchase, Olga Kharif highlights the real impact. The company wrote in an email:


“Having gone through this process ourselves now, we’re confident we can guide clients and prospective clients through the process of cryptoasset treasury allocation. Our investment allows us to share our journey, our experiences, our challenges with them so that we can help them navigate the cryptoasset world.”

The professional services organization is positioning themselves to be the advisor of choice for various corporations that want to put digital assets on their balance sheet. This is incredibly forward-thinking and an intelligent strategic move in my opinion.


The process to underwrite, approve, and execute the purchase of bitcoin and ethereum appears to have been quite cumbersome for KPMG. They described it with the following detail:


KPMG established a governance committee to provide oversight and approve the treasury allocation. The committee included stakeholders from Finance, Risk Management, Advisory, Audit and Tax, and it 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.


You can imagine that this level of diligence and attention to detail will strike confidence in their clients who are considering the same decision. There is no way to quantify the direct impact KPMG’s move will contribute to the broader bitcoin and crypto ecosystem, but it is quite difficult to see a world where there is no impact at all.


We now have one of the largest accounting, tax, and advisory services in the world holding crypto assets on their balance sheet. They are openly stating that they have the playbook and experience to help other corporations go through the same process. Over a long enough timeframe, it feels like corporate demand will continue to explode and these assets will benefit from persistent buys, along with long-term holders, for years and decades to come.


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