CCA DeFi & Digital Asset Valuation 2

Question 1

A company receives 1 BTC as payment for services rendered. When does revenue recognition occur under ASC 606?

Accepted Answer

When the performance obligation is satisfied, with revenue measured at the fair value of BTC on that date

Answer

Under ASC 606, revenue is recognized when the performance obligation is satisfied and measured at the transaction price, which for crypto consideration is the fair value of the cryptocurrency at the date the obligation is fulfilled.

Question 2

When auditing a DeFi protocol's treasury, the auditor notes the protocol holds its own governance token as a treasury reserve asset. What is the primary audit concern?

Accepted Answer

Self-referential valuation — the treasury value is circular because the token's price depends on the protocol's perceived health

Answer

A protocol holding its own governance token creates circular valuation — if the protocol struggles, the token drops, reducing treasury value, which further undermines confidence in the protocol, creating a self-reinforcing spiral.

Question 3

For U.S. tax audit purposes, which cryptocurrency transaction type triggers a taxable realization event?

Accepted Answer

Exchanging one cryptocurrency for another on a DEX

Answer

Under IRS guidance, swapping one cryptocurrency for another is a taxable disposition of the first asset, triggering capital gains or losses based on the fair market value at the time of the exchange.

Question 4

What is the most reliable price source an auditor should use when determining the fair value of a major cryptocurrency like Ether at a specific historical date and time?

Accepted Answer

Volume-weighted average price (VWAP) from multiple major exchanges aggregated by a reputable data provider

Answer

A VWAP aggregated across multiple major exchanges from a reputable data provider (e.g., Coin Metrics, Kaiko) minimizes single-exchange manipulation and represents the most defensible, market-wide price for audit evidence.

Question 5

A stablecoin issuer claims its token is 1:1 backed by USD reserves. Which audit procedure provides the highest assurance over this claim?

Accepted Answer

Confirming reserve balances directly with the custodian bank and reconciling to total stablecoin supply on-chain

Answer

Direct bank confirmation of reserve balances, reconciled against the total circulating token supply verifiable on-chain, provides the highest assurance that the 1:1 backing claim is accurate.

(CCA) Certified Cryptocurrency Auditor Practice Test

(CCA) Certified Cryptocurrency Auditor Practice Test

CCA DeFi & Digital Asset Valuation 2