Glossary
The vocabulary, without the assumption you already have it.
Written for a finance lead who is new to this rather than to demonstrate that we know the words. Where a term means materially different things in different regimes, the entry says so instead of flattening it.
A
- AMLThe framework of controls a regulated business must operate to detect and prevent money laundering and terrorist financing.
- ASU 2023-08The US GAAP standard requiring in-scope crypto assets to be measured at fair value with changes recognised in net income.
- AttestationA practitioner's report on a specific subject matter against stated criteria — narrower than an audit, and not interchangeable with one.
C
- CARFThe OECD framework requiring crypto-asset service providers to collect and report user and transaction data to tax authorities, which then exchange it internationally.
- CASPA crypto-asset service provider authorised under the EU's MiCA regulation, whose authorisation is valid across all 27 EU and EEA states.
- Cost basisThe original value of an asset for tax and accounting purposes, tracked per lot, from which gain or loss on disposal is calculated.
- Counterparty riskThe risk that a venue, custodian or lender holding your assets fails or cannot return them.
D
- DAC8The EU directive implementing CARF, extending administrative cooperation in tax matters to crypto-asset service providers.
- DAO wrapperA legal entity adopted by a decentralised organisation to give it legal personality and limit member liability.
- DLOMA reduction applied when valuing an asset that cannot be freely sold, such as a locked or vesting token allocation.
- DORAThe EU regulation setting information and communication technology risk requirements for financial entities, including crypto-asset service providers.
E
- Economic substanceThe requirement that an entity has real activity, people and decision-making where it claims to be, rather than only a registered address.
- Existence and rightsThe audit assertion that an entity's assets exist and that it controls them — the hardest assertion to evidence for digital assets.
F
I
K
L
M
- MiCAThe EU regulation that created a single authorisation regime for crypto-asset service providers and rules for asset-referenced and e-money tokens.
- MPCA cryptographic technique that splits a private key into shares held by different parties, so signing requires cooperation without any party ever holding the whole key.
- MultisigA wallet arrangement requiring a defined number of signatures from a defined set of signers before a transaction executes.
N
P
- PassportingThe principle that an authorisation granted in one EU or EEA state is valid throughout the bloc without further authorisation.
- Permanent establishmentA taxable presence in a country created by having a fixed place of business or dependent agent there, even without a local company.
- Proof of reservesAn exercise intended to demonstrate that a custodian holds assets matching customer balances, usually combining on-chain balance evidence with a commitment to the liability set.
Q
R
S
- SAFTAn investment contract giving a purchaser the right to receive tokens when they are created.
- Self-certificationA declaration by an account holder of their tax residence and identifying details, which a reporting provider must obtain and test for reasonableness.
- SlashingA protocol penalty that destroys part of a validator's staked assets for misbehaviour or downtime.
- Staking rewardsAssets received for participating in a proof-of-stake network's consensus, whose recognition timing is genuinely unsettled.
- SubledgerA system that ingests on-chain and venue activity, classifies it and produces accounting entries for the general ledger.
T
- TGEThe point at which a project's token is created and distributed — after which most of its accounting and tax characteristics are fixed.
- Token warrantA right to receive tokens granted alongside an equity investment, typically for no separate consideration.
- Transfer pricingThe rules governing the prices charged between entities under common control, requiring them to reflect what unrelated parties would agree.
- Travel RuleThe requirement that originator and beneficiary information travels with a virtual-asset transfer between service providers, mirroring the rule for wire transfers.
- Treasury policyA board-adopted document setting what a business may hold, where, in what concentration, and who may move it.