Research Summary
The report discusses the role, responsibilities, and challenges of CFOs in cryptocurrency companies. It covers the difficulties in financial reporting, the need for automation, the importance of wallet and fiat bank account management, fund transfer channels, cross-border cryptocurrency payments, capital management, and compliance and reporting.
Key Takeaways
Challenges in Financial Reporting
- Complexity of Data: CFOs in Web3 companies face challenges in organizing financial information, which is scattered across multiple on-chain/off-chain data sources. This leads to non-transparent disclosure, inconsistent calibers, and untimely reporting.
Role of CFOs in Web3 Companies
- Strategic Role: Beyond controlling costs, Web3 CFOs play a strategic role in seeking new business profit points, timely reducing business lines with unsatisfactory profits, and providing the most timely strategic adjustments for the enterprise from the perspective of cash flow.
Cryptocurrency Wallets and Custody
- Risk Diversification: CFOs are recommended to use different wallets for different purposes to facilitate management and diversify risks. Large funds should be stored on self-custodial platforms to prevent potential risks associated with centralized platform custody.
Fiat Bank Account Management
- Importance of Compliance: Organizing the company’s entities and managing bank accounts have become crucial due to the regional mix of “compliance licenses + merchant resources.” Proper organization can help plan operations in different regions and meet compliance requirements.
Capital Management
- Asset Allocation Strategy: For Web3 CFOs, the strategy for financial asset allocation and management aims at capital preservation, liquidity, and income. Diversification is key, and cash is king. It is also crucial to identify tokens with valuation bubbles and ensure a quick capital turnover.
Actionable Insights
- Embrace Automation: With the increasing adoption of digital assets, there is an urgent need for automation of daily repetitive work in Web3 companies. CFOs should explore software solutions to replace lengthy and complicated data processing.
- Adopt a Strategic Approach: CFOs in Web3 companies should go beyond traditional financial roles and adopt a strategic approach to identify new business profit points and make timely strategic adjustments.
- Implement Robust Wallet Management: CFOs should implement robust wallet management strategies, using different wallets for different purposes to diversify risks and facilitate management.
- Ensure Compliance: CFOs should ensure that the company’s entities are properly organized and bank accounts are managed effectively to meet compliance requirements and facilitate operations in different regions.
- Adopt a Prudent Capital Management Strategy: CFOs should adopt a prudent capital management strategy that prioritizes capital preservation, liquidity, and income. They should also be cautious about tokens with valuation bubbles and ensure quick capital turnover.
