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When a SMSF sent its BTC holding from CoinSpot a/c to cold storage, what documentation should be required to support the the existence of the investment, the coin balance & whether the investment is held in the SMSF's name?
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Hi Linda
Cold storage of crypto is removing it from your "wallet" and storing it so it is not connected to the internet. It is normally stored this way to help prevent theft by internet / crypto "hackers".
I am speaking to a crypto specialist and will come back to you re the documentation that they believe should be obtained in such a situation. If it is in cold storage my view is that you would get a declaration as to what is held by the trustees.
My view is that is if the crypto is in cold storage, if material, this would normally warrant a Part A financial audit report qualification.
As an example the extract of the audit report would state:
“Part A: Financial audit
Qualified Opinion
I have audited the special purpose financial report of Smith Superannuation Fund
comprising the statement of financial position as at 30 June 2021, and the operating
statement, a summary of significant accounting policies and other explanatory notes.
In my opinion, except for the effects on the financial report of the matter referred to in the Basis of Qualified Opinion section of my report below, the financial report
presents fairly in all material respects, in accordance with the accounting policies
described in the notes to the financial report the financial position of the fund at 30
June 2021 and the results of its operations for the year then ended.
Basis for Qualified Opinion
The Fund Trustee has invested in Cryptocurrency as at 30 June 2021. The total
carrying value of this investment is $120,000 as at 30 June 2021. As we have not
received reliable audit evidence to support the ownership of these assets we provide no opinion on the market value of these Cryptocurrency as at 30 June 2021."
If other member's have a view on this issue that would be appreciated.
Thanks
SMSF AAA