• Bitwave has acquired a cryptocurrency accounting firm, Gilded in the ever-changing crypto market
• This acquisition underscores the transformative potential of digital asset payments and the convergence between traditional financial institutions and the crypto sector
• Regulatory developments in digital asset accounting further emphasize the need for standardized reporting practices, providing greater transparency and stability in the evolving crypto landscape

As the cryptocurrency industry continues to navigate the challenging landscape of a “crypto winter,” characterized by market volatility and regulatory scrutiny, a prominent trend has emerged: consolidation. This trend is exemplified by the recent acquisition of Gilded, a payments and accounting platform, by one of its competitors, Bitwave. This strategic move reflects the ongoing evolution of the crypto sector, where companies are seeking ways to enhance their offerings and adapt to changing market dynamics.

Bitwave’s acquisition of Gilded holds significant implications for the cryptocurrency ecosystem, particularly in the context of enterprise solutions and financial services. Additionally, as part of the integration process, Ken Gaulter, Chief Technology Officer of Gilded, will join Bitwave’s engineering team, contributing his expertise to further develop and refine the platform.

Moreover, this strategic move comes on the heels of Bitwave’s recent acquisition of Multisig Media, underscoring the company’s commitment to expanding its market presence and diversifying its offerings. As the cryptocurrency industry matures and seeks to gain broader acceptance, companies like Bitwave are positioning themselves to provide comprehensive solutions to meet the complex needs of enterprises operating in this space.

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Pat White, Co-Founder and CEO of Bitwave highlighted the transformative potential of digital asset payments, describing them as faster and more cost-effective than traditional payment rails. Furthermore, in an increasingly hyperconnected global economy, the speed and efficiency of financial transactions play a pivotal role in business operations. White views digital asset payments as a game-changing innovation that can empower businesses to streamline their financial processes.

While the specific financial details of the acquisition were not disclosed by the companies involved, the implications of this consolidation extend beyond the immediate transaction. This development reflects the broader trends and challenges faced by the cryptocurrency industry as it seeks to achieve mainstream adoption and navigate the complexities of regulatory oversight.

Gilded, founded in 2018, was established with a clear mission: to assist companies in seamlessly integrating cryptocurrency solutions into their financial reporting and accounting processes. Moreover, over the years, Gilded has made significant strides in achieving this goal, amassing a diverse clientele of over 130 enterprises. These clients span various sectors, including crypto startups, non-fungible token (NFT) marketplaces, decentralized autonomous organizations (DAOs), miners, and accounting firms. Gilded’s value proposition lies in its ability to bridge the gap between traditional financial reporting practices and the emerging world of cryptocurrencies.

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Crucially, Gilded’s existing customers will continue to have access to its suite of products and services. Simultaneously, they will be introduced to Bitwave’s comprehensive platform, which extends beyond accounting and payments into a broader range of financial services tailored for the crypto industry. This integration promises to provide Gilded’s clients with a more holistic and robust set of tools to navigate the evolving landscape of digital finance.

Bitwave, also founded in 2018, shares a similar focus on providing crypto accounting and compliance services. The company’s recent Series A funding round, which raised $15 million in December 2022, underscores the growing investor interest in crypto-related ventures. Hack VC and Blockchain Capital led this funding round, signifying the industry’s increasing recognition of the importance of crypto-focused financial services.

The injection of capital from the Series A round was earmarked for the expansion of Bitwave’s crypto solutions, with a specific emphasis on addressing the intricate accounting requirements of enterprises. As businesses increasingly engage with cryptocurrencies and digital assets, the need for robust accounting and compliance solutions becomes paramount. Bitwave aims to position itself as a leader in this space, offering comprehensive tools to meet the evolving needs of its clients.

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Furthermore, Bitwave’s strategic partnership with Deloitte, one of the Big Four accounting firms, is indicative of the growing convergence between traditional financial services and the crypto sector. This partnership aims to facilitate the seamless integration of blockchain data into enterprise resource planning (ERP) systems, bridging the gap between legacy financial infrastructure and emerging digital technologies. As enterprises grapple with the complexities of adopting blockchain and digital assets, solutions that connect these worlds become increasingly valuable.

Pat White emphasized the transformative potential of crypto payments in shaping the future of finance. He highlighted their advantages, such as instant settlement and minimal fees, which have gained the attention of financial institutions. This recognition underscores the broader trend of traditional financial players exploring the possibilities offered by blockchain technology and cryptocurrencies. However, as these institutions delve into the crypto space, the industry is witnessing a convergence of traditional and digital finance, with the potential to revolutionize financial services.

The timing of Bitwave’s acquisition of Gilded is noteworthy, as it coincides with the unveiling of new regulations for digital asset accounting by U.S. regulators. On September 6, 2023, the U.S. Financial Accounting Standards Board approved guidelines detailing how companies should report the fair value of their cryptocurrencies on their balance sheets. This regulatory development represents a significant step toward standardizing reporting practices in the crypto industry.

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Pat White commented on the evolving regulatory landscape, expressing optimism about the increased clarity provided by regulators regarding tax and accounting aspects of digital assets. He noted that the Internal Revenue Service (IRS) has recently offered insights into the taxation of staking rewards and clarified the definition of a ‘broker,’ which has implications for the issuance of new 1099-DA forms to customers. These regulatory actions reflect the growing attention and scrutiny that digital asset transactions are receiving from government agencies. With clearer rules and regulations in place, regulators are better equipped to monitor and enforce compliance within the digital asset space.

The strategic move by Bitwave underscores the transformative potential of digital asset payments, which offer speed and cost-effectiveness compared to traditional payment methods. In addition, this innovation aligns with the broader trend of financial institutions recognizing the value of blockchain technology and cryptocurrencies. As traditional and digital finance converge, the financial services landscape is undergoing a profound transformation, with

the potential to reshape how businesses and individuals engage with financial transactions.

Furthermore, Bitwave’s partnership with Deloitte highlights the increasing collaboration between established financial players and the crypto sector. The integration of blockchain data into enterprise resource planning systems represents a bridge between legacy financial infrastructure and emerging digital technologies. This convergence is particularly relevant as enterprises navigate the complexities of adopting blockchain and digital assets in their operations.

The timing of Bitwave’s acquisition coinciding with the release of new digital asset accounting regulations in the United States emphasizes the importance of regulatory clarity in the crypto industry. Furthermore, clear and standardized reporting practices are essential for fostering transparency and accountability in digital asset transactions. Regulators are taking proactive steps to define tax and accounting rules for digital assets, providing a more stable regulatory environment for industry participants.