What Should an Audit Committee Know About Bitcoin Treasury Risk?

The committee should understand how the company demonstrates ownership or control of Bitcoin, how wallets and custodians are reconciled, and how access is restricted. Material holdings require evidence that goes beyond a screenshot of a balance.

For entities subject to U.S. GAAP, qualifying crypto assets within the scope of ASU 2023-08 are measured at fair value with changes recognized in net income. The committee should confirm that the accounting treatment actually applies to the company’s assets and that disclosures are consistent with the standard and company facts.

Purchases, transfers, and sales should require documented authorization and appropriate separation between initiation, approval, execution, and reconciliation. Wallet architecture and custodian workflows should support those controls.

Metrics such as mNAV and BTC Yield can be useful, but they are not standardized accounting measures. The audit committee should understand definitions, source data, period-to-period consistency, and how prominently limitations are disclosed.

Custodians, exchanges, banks, auditors, valuation providers, and technology vendors can all become control dependencies. Concentration and service continuity should be visible.

The audit committee’s job is to make the treasury strategy auditable. It should be able to trace material Bitcoin positions from authorization through custody, valuation, financial reporting, and disclosure, while keeping company-defined performance metrics clearly separated from GAAP measures.