In the spate of cryptocurrency bankruptcies last year, self issued crypto tokens played significant roles in the demise of FTX and Celsius. However, last week the Financial Accounting Standards Board (FASB) said its yet-to-be-issued crypto asset accounting standards would not cover self issued tokens or those issued by related parties.
In the case of FTX, the cryptocurrency exchange held large quantities of the self issued FTT token and other related party tokens, which had a tiny circulating supply. Nonetheless, it attributed the same market value to all the locked-up tokens it held, amounting to $9 billion shortly before the bankruptcy.
Turning to bankrupt crypto lender Celsius, the court appointed examiner alleged that Celsius spent $558 million propping up its own CEL token price while insiders sold. This also inflated the Celsius balance sheet.
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