House Democrat Pans Central Part of Crypto Accounting Proposal

US accounting standard-setters shouldn’t let companies count volatile cryptocurrencies on their balance sheets as assets and only let companies report the expenses to acquire crypto, Rep. Brad Sherman (D-Calif.) told US accounting rulemakers.

The collapse of crypto exchange FTX and the failure of crypto-friendly Silvergate Capital Corp. demonstrates the “inherent risks” in crypto and the difficulty to determine their fair market value, Sherman this week told the Financial Accounting Standards Board, which is attempting to write the first set of accounting rules for the crypto industry.

“The inclusion of such volatile cryptocurrencies on a company’s balance sheet can make financial ...