Recent Developments in the Cryptocurrency Landscape 

By Joseph Jalbert June 9, 2025

In a significant policy shift, the Federal Deposit Insurance Corporation (FDIC) rescinded Financial Institution Letter FIL-16-2022, which had previously required FDIC-supervised institutions to notify the agency before engaging in crypto-related activities. This move, announced on March 28, 2025, reflects a broader regulatory evolution aimed at integrating digital assets into traditional financial systems while ensuring robust risk management practices. 

A New Regulatory Landscape 

FIL-16-2022, issued on April 7, 2022, mandated that FDIC-supervised institutions notify the agency before engaging in crypto-related activities. These activities encompassed services such as crypto-asset custody, stablecoin reserve management, and participation in blockchain-based payment systems. This prior notification requirement was intended to allow the FDIC to assess potential risks and ensure that institutions had appropriate risk management frameworks in place. 

The rescission of this letter signifies a shift towards a more permissive regulatory approach. The FDIC now clarifies that institutions may engage in permissible crypto-related activities without prior approval, provided they manage associated risks effectively. This change aligns with the FDIC’s expectation that institutions conduct all activities in a safe and sound manner, adhering to applicable laws and regulations. 

The FDIC emphasizes the importance of managing risks such as market volatility, cybersecurity threats, and compliance with anti-money laundering laws. Institutions are encouraged to engage with their supervisory teams as needed to ensure that their crypto-related activities are appropriately managed. 

Accounting for Crypto Assets 

In the time between the issuance and subsequent rescission of FIL-16-2022, the Financial Accounting Standards Board (FASB) introduced new guidance on the accounting and disclosure of crypto assets. In December 2023, FASB issued Accounting Standards Update (ASU) 2023-08, which introduces Subtopic 350-60—”Intangibles—Goodwill and Other—Crypto Assets.” This standard provides comprehensive guidance on how entities should account for and disclose certain crypto assets. 

The guidance applies to crypto assets that meet the following criteria: 

• They meet the definition of an intangible asset under U.S. Generally Accepted Accounting Principles (GAAP); 

• They do not provide the asset holder with enforceable rights to or claims on underlying goods, services, or other assets; 

• They are created or reside on a distributed ledger based on blockchain or similar technology; 

• They are secured through cryptography; 

• They are fungible; and 

• They are not created or issued by the reporting entity or its related parties. 

This scope generally encompasses widely recognized cryptocurrencies like Bitcoin and Ethereum, while excluding non-fungible tokens (NFTs) and certain stablecoins. The determination of the accounting model that should be applied to various crypto assets can be complex and should be based on all facts and circumstances, giving consideration to the nature of the asset and any associated enforceable rights. 

Measurement and Presentation 

Under ASC 350-60, in-scope crypto assets must be measured at fair value in accordance with ASC 820, with changes in fair value recognized in net income. This approach replaces the previous model, which required crypto assets to be accounted for as indefinite-lived intangible assets using a cost less impairment model. The new fair value measurement provides a more accurate reflection of the economic impact of crypto assets on an entity’s financial position. 

Entities are required to present in-scope crypto assets separately from other intangible assets on their balance sheet. Additionally, gains and losses from the remeasurement of these assets should be reported in net income, distinct from impairments or other changes to the carrying amounts of other intangible assets. 

Disclosure Requirements 

ASU 2023-08 mandates enhanced disclosures to provide stakeholders with clearer insight into an entity’s crypto asset holdings. These disclosures include: 

• The name, cost basis, fair value, and number of units for each significant crypto asset holding; 

• The aggregate fair values and cost bases of crypto asset holdings that are not individually significant; 

• Information about contractual sale restrictions, including the fair value of restricted crypto assets, the nature and remaining duration of the restrictions, and circumstances that could cause the restrictions to lapse; 

• A rollforward of crypto asset holdings during the reporting period, detailing acquisitions, disposals, and changes in fair value; 

• The difference between the disposal price and cost basis for any dispositions that occurred during the reporting period, including a description of the activities that resulted in the disposition(s); 

• The income statement line item in which gains and losses are presented, if not presented separately; and 

• The method for determining the cost basis of crypto assets. 

These disclosures aim to improve transparency and assist stakeholders in assessing the risks and returns associated with crypto asset investments. This standard is now effective for calendar year-end reporting companies and requires a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity) as of the beginning of the reporting period in which an institution adopts the standard if they held crypto assets at that time. 

Other Considerations 

Institutions must ensure that their crypto-related activities comply with existing laws and regulations, including those related to anti-money laundering, consumer protection, and cybersecurity. The FDIC’s emphasis on risk management underscores the need for robust internal controls and governance structures. 

The regulatory and accounting changes may influence strategic decisions regarding investments in crypto assets. Institutions will need to assess the potential financial impact, including volatility and liquidity considerations, and determine how crypto assets align with their overall business objectives. 

Is Your Institution Crypto-Ready? 

The FDIC’s rescission of FIL-16-2022 and the FASB’s introduction of ASC 350-60 represent pivotal developments in the integration of crypto assets into the financial system. These changes reflect a recognition of the growing importance of digital assets and the need for regulatory frameworks that balance innovation with risk management.  That said, the decision to enter the crypto space should be made with care, balancing the risks and rewards and ensuring alignment with the institution’s strategic objectives. 

Financial institutions must navigate this evolving landscape by ensuring compliance with regulatory requirements, adopting appropriate accounting practices, and making informed strategic decisions. As the regulatory environment continues to develop, ongoing engagement with supervisory bodies and adherence to best practices will be essential for institutions that decide to make the leap into the crypto space.

If you have any questions or if you would like to further discuss any of these items in more detail, please contact Joseph Jalbert or your BNN advisor at 800.244.7444.