An allocator who has approved a manager's strategy, custody arrangement and terms still has one document to read every month: the NAV pack. For a fund holding digital assets, that pack rests on more judgment calls than its equity or bond equivalent, and several of them are still unsettled across jurisdictions.
Who strikes the price, and from what
In a traditional fund, the administrator prices positions from a small number of recognised feeds and the process is largely mechanical. A digital asset trades continuously, across dozens of venues with no consolidated tape, and the same token can show materially different prices on different venues at the same instant.
For financial reporting under US GAAP, the starting point is not a blended market price at all. ASC 820 measures fair value in the asset's principal market, which the AICPA's digital assets practice aid defines as the market with the greatest volume and level of activity for the asset that the reporting entity can actually access, with the market in which the entity normally transacts presumed to be that principal market unless evidence says otherwise. A fund's own pricing policy for striking NAV is a separate document from its GAAP financial statements, and the two do not have to use the same convention, which is precisely why the policy is worth reading.
Administrators describe their own process in looser terms. One fund administrator's published description of crypto fund administration says that "reliable valuation depends on aggregating prices from multiple venues and applying fair value adjustments when liquidity is thin or pricing is inconsistent" (vendor material, NAV Fund Services, accessed 17 September 2026). That is a reasonable description of a commercial pricing process and it is not the same test as ASC 820's. The question to put to an administrator is which venues sit in the basket, what happens when one of them halts trading or delists the token, and who signs off on the exception.
For funds registered under the US Investment Company Act, Rule 2a-5 requires a board, or a valuation designee the board appoints and actively oversees, to determine fair value in good faith under a documented methodology, with testing of that methodology and of any pricing service used. The SEC adopted the rule on 3 December 2020; it took effect on 8 March 2021 with a compliance date of 8 September 2022. It reaches registered investment companies and business development companies, not private funds, so most digital asset vehicles fall outside it. Its structure is still a usable checklist for an allocator reading a private fund's valuation policy: is there a named party responsible for the determination, a written methodology, and evidence that anyone has tested it.
Valuation policy: illiquid, locked and staked positions
A listed, liquid token is the easy case. The harder ones are private allocations, vesting tranches, governance tokens with thin secondary markets, and liquidity pool positions. Operational due diligence on a manager should include asking to see the written valuation policy and a sample month's NAV pack, specifically for how these positions are marked, rather than accepting a generic reference to "fair value".
The practice aid sets out what an auditor is expected to look at when a holding is thinly traded: the entity's analysis of its principal or most advantageous market, its valuation model and significant assumptions, whether reported trades were orderly and whether they involved related parties, and whether the market for a supposedly comparable asset is genuinely active. It adds a caution that matters for anyone reading a mark built on comparables, noting that it may be difficult to conclude that two digital assets are sufficiently comparable for ASC 820 purposes at all.
Where the accounting rules sit
Under US GAAP, ASU 2023-08, issued by the FASB on 13 December 2023 and effective for fiscal years beginning after 15 December 2024, created Subtopic 350-60. A crypto asset is in scope only if it meets all six criteria in ASC 350-60-15-1: it meets the codification's definition of an intangible asset, gives the holder no enforceable rights to or claims on underlying goods, services or other assets, is created on or resides on a blockchain or similar distributed ledger, is secured through cryptography, is fungible, and is not created or issued by the reporting entity or its related parties. In-scope assets are measured at fair value under ASC 820 with remeasurement gains and losses in net income. That is a measurement basis; it does not tell a valuer how to price an asset with no active market. What the financial statements actually show covers that standard's scope and its exclusions in more detail.
IFRS has no dedicated crypto asset standard. The IFRS Interpretations Committee's agenda decision of June 2019 concluded that a holding of cryptocurrency is neither cash nor a financial asset, that IAS 2 applies when the holding is held for sale in the ordinary course of business, and that IAS 38 applies otherwise. The fair-value-less-costs-to-sell measurement people often attach to that decision is narrower than it sounds: it comes from paragraph 3(b) of IAS 2 and reaches commodity broker-traders, not every entity that holds inventory. Under IAS 38's default cost model, an illiquid token sits at cost and is tested for impairment. The revaluation model is available only where an active market exists, defined in IFRS terms as a market in which transactions take place with sufficient frequency and volume to provide pricing information on an ongoing basis, a bar a small number of the largest tokens can clear and almost nothing else can. Where it does apply, revaluation increases go to other comprehensive income rather than profit or loss, a genuinely different picture from the US position for an identical asset.
Locked and staked positions
Here the intuition that a locked position should simply be marked down runs into the standard. ASC 820 does not permit a fair value measurement to carry a blockage factor, a discount applied because normal daily trading volume could not absorb the quantity held, and the practice aid states plainly that the portfolio exception does not apply to crypto intangible assets and that adjusting a mark for the size of a holding is therefore inappropriate. Restrictions that are a characteristic of the asset itself are a different question from restrictions that are a characteristic of the holder's position, and the distinction is where most of the argument lives.
Neither the FASB nor the IASB has issued measurement guidance specific to staked, bonded or contractually locked positions. Where the principal market is not active, the practice aid points entities to a weighting framework drawn from ASC 820-10-35-54J and the AICPA's private company and venture capital valuation guides: weigh an orderly transaction in an identical asset, weigh a transaction in a related asset according to the circumstances, place little or no weight on a transaction that is not orderly, and maximise observable inputs throughout. That is a method for reaching a number, not a rule that produces the same number in two funds. An allocator comparing two funds' staking yield should ask what unbonding assumption and what valuation inputs sit behind each mark, because a quoted staking yield without that context is not a like-for-like figure.
Verifying holdings against a custodian or the chain
A NAV figure is only as good as the position data behind it, and that data can be verified in two ways that are sometimes conflated. The first is a custodian statement or a service organisation controls report, the analogue of the prime broker record a traditional administrator reconciles against. The second is direct on-chain verification: an address, a signed message, or a proof-of-reserves style attestation showing that specified assets exist at an identified address. What proof of reserves actually proves sets out why the second kind, however well designed, establishes existence and technical control at a point in time and not solvency, completeness of liabilities, or continuing coverage.
The distinction that matters for a fund's NAV is between control and ownership. The AICPA practice aid, in its edition as of 30 September 2025, puts it directly: knowledge of the private key represents control of the digital assets, and although procedures such as signing messages or moving assets can evidence that control, additional procedures are often needed to obtain sufficient appropriate audit evidence of ownership. The aid also notes that a custodian may commingle many customers' assets in the same addresses and keep its own off-chain ledger, at which point the blockchain no longer represents any single client's holdings and confirmation with the custodian becomes necessary. Who actually holds it covers how custody arrangements themselves vary in what legal protection they confer, which is a related but separate question from whether the reported balance is real.
What the auditor's opinion actually covers
An audit opinion addresses whether the financial statements, taken as a whole, are fairly presented at a stated materiality threshold, under a defined framework, as of a defined date. It is not a continuous solvency guarantee and it is not a statement that every valuation judgment was the only reasonable one.
The PCAOB's Spotlight report of September 2024, "Observations From the Target Team's 2023 Inspections", is the clearest public picture of how these audits are actually going. The target team reviewed 11 public company audits with crypto asset activity across four US global network firms, and identified deficiencies in five of those audits across three firms, in the auditor's response to the risks of material misstatement, in the integrated audit of internal control over financial reporting, in audit evidence, in the reporting of non-US audit participants on Form AP, and in one instance in procedures over auditor independence. Separately, and expressly short of a deficiency, the report describes what the team observed on risk assessment: of the 11 audits, one engagement team treated the risk of material misstatement as remote on the basis that it sat with a third-party custodian, supported by reviewing the custodian's contractual indemnity. It also records as a good practice that on every reviewed audit with a material crypto balance the engagement team used auditor-employed specialists or the firm's subject matter groups, including pricing desks.
That report concerns audits of public companies, not of funds, so it does not describe fund audits directly. The question it suggests for a manager's audit committee transfers anyway: has this firm audited digital assets before, and with what specialist resource behind the engagement team.
One structural gap is worth naming. The AICPA practice aid records that as of its writing there is no widely accepted confirmation form or process for digital asset custodians or exchanges, of the kind that exists for cash balances held at financial institutions. Auditors adapt existing procedures instead, corroborating custodian records against blockchain data themselves or through a specialist, and deciding case by case whether a given custodian's response is reliable as audit evidence. That is one reason the same underlying facts can produce different audit evidence files at different firms.
Reconciliation across venues
A fund trading across several exchanges, a handful of DeFi protocols and one or more custodians generates records that do not natively agree: exchange trade blotters, wallet-level on-chain activity and custodian statements each describe the same economic event differently. Administrators market automation as the answer, and NAV Fund Services describes its own process as integrating blockchain data with exchange and trade records to speed matching and create an audit-ready trail. Automation does not remove the judgment calls at the exceptions: a delayed on-chain confirmation, a bridge transaction that appears twice in different ledgers, or a wrapped-token balance that has to be mapped back to its underlying asset before it means anything on the NAV pack. The question that actually distinguishes administrators is whether the reconciliation is independent of the manager's own records, or whether it applies pricing to numbers the manager has already reported.
Forks, airdrops and staking rewards
These events are common in a digital asset portfolio and poorly served by existing accounting literature. ASC 350-60 sets a subsequent measurement basis for crypto assets already recognised; it does not say when a newly received fork, airdrop or validation reward should first be recognised as an asset, or at what amount. The practice aid treats this as a matter for the entity's own accounting policy, directing auditors to understand management's policies for recognising digital assets received from hard forks, airdrops or validating activities, and flagging the related completeness risk that an entity fails to record assets that arrived this way at all.
The position is clearer for US tax than for US GAAP. Revenue Ruling 2019-24, issued by the IRS on 9 October 2019, holds that a taxpayer who receives units of a new cryptocurrency by airdrop following a hard fork has ordinary income equal to the fair market value of those units when the airdrop is recorded on the distributed ledger, provided the taxpayer can then exercise dominion and control over them, and that a hard fork producing no new units for the taxpayer is not itself a taxable event. That treatment does not resolve when or at what value the same event is booked for financial reporting. Under IFRS the gap is wider still: neither the IASB nor its Interpretations Committee has addressed forks or airdrops, and the June 2019 agenda decision does not reach them.
Where this is settled, and where it is not
Measurement of a recognised, in-scope crypto asset is now reasonably settled under US GAAP: fair value through net income from the 2025 fiscal year, with a comparable but not identical fair value route under IFRS only where an active market exists. Confirmation of existence and ownership is not settled: there is no widely accepted custodian confirmation process, and the practitioner literature itself separates control of a private key from ownership of the asset it unlocks. Recognition of forks, airdrops and staking rewards is the least settled of the three, resolved for US tax purposes but not for financial reporting in either framework. An allocator reading a NAV pack should expect the first to be broadly comparable across managers, and should not expect the second or third to be, however confident the pack itself sounds.
None of this is accounting, tax, legal or investment advice. A fund's own valuation policy, its auditor's engagement letter and independent professional advice are the only sources that answer these questions for a specific holding.