{"id":229222,"date":"2021-04-17T10:13:00","date_gmt":"2021-04-17T07:13:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/mergers-and-acquisitions-are-rising-leaving-crypto-assessments-in-question\/"},"modified":"2021-04-17T10:13:00","modified_gmt":"2021-04-17T07:13:00","slug":"mergers-and-acquisitions-are-rising-leaving-crypto-assessments-in-question","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/mergers-and-acquisitions-are-rising-leaving-crypto-assessments-in-question\/","title":{"rendered":"# Mergers and acquisitions are rising, leaving crypto assessments in question"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3be409821d6\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3be409821d6\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/mergers-and-acquisitions-are-rising-leaving-crypto-assessments-in-question\/#Digitizing_the_world_of_finances\" >Digitizing the world of finances<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/mergers-and-acquisitions-are-rising-leaving-crypto-assessments-in-question\/#The_need_for_due_diligence\" >The need for due diligence<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/mergers-and-acquisitions-are-rising-leaving-crypto-assessments-in-question\/#The_nuances_of_the_crypto_space\" >The nuances of the crypto space<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Mergers and acquisitions are rising, leaving crypto assessments in question <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDQvNDc4YzhmYWEtOTQ1Ny00YWRlLTljNWQtYmEzOWRhZTQ4MDM0LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-5a136f3a>Fintech, cryptocurrency and mergers and acquisitions are poised to intersect significantly in the coming year. M&amp;A activity is <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ftiresiliencebarometer.com\/report\">expected<\/a> to rebound quickly \u2014 more than 60% of decision-makers at large companies who were surveyed by FTI Consulting for a February report agree that their company has recently been a target of aggressive M&amp;A, and 39% say their companies are looking at M&amp;A as a result of the COVID-19 pandemic. At the same time, the cryptocurrency market is making strides toward mainstream acceptance.<\/p>\n<p>As a result, there\u2019s likely to be an uplift in deals involving cryptocurrency assets and valuations throughout 2021. While this trend is likely to spur some exciting developments in the financial sector, it is also starting to raise unprecedented questions about whether cryptocurrency and these complex business models can be accurately assessed and verified in the context of dealmaking.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Digitizing_the_world_of_finances\"><\/span>Digitizing the world of finances<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The effects of the COVID-19 pandemic have driven significant shifts from physical to digital services across a wide range of industries \u2014 none more dramatically than in the financial services industry, in which S&amp;P Global has <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.spglobal.com\/marketintelligence\/en\/news-insights\/latest-news-headlines\/big-tech-rather-than-banks-to-drive-fintech-m-a-in-2021-with-payments-key-61887467#:~:text=6%20Jan%2C%202021-,Big%20tech%20rather%20than%20banks%20to%20drive,in%202021%2C%20with%20payments%20key&amp;text=Banks%20will%20still%20have%20the,in%20their%20dealmaking%2C%20analysts%20said.\">reported<\/a> that an estimated 420 billion transactions, worth $7 trillion, will switch to cards and digital payments by 2023, reaching $48 trillion by 2030. <\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>How has the COVID-19 pandemic affected the crypto space? Experts answer<\/em><\/strong><\/p>\n<p>PayPal further legitimized cryptocurrency when it began accepting it in November 2020 and announced its acquisition of Israeli crypto startup Curv in March. Visa has also been active in the fintech arena, most recently with its $5.3 billion acquisition of Plaid in January. Investors are also keeping a close eye on the developments that will follow Coinbase&#8217;s recent debut on the Nasdaq stock exchange. Naturally, all of this activity is generating a lot of interest in fintech and cryptocurrency companies among traditional financial services institutions and big tech corporations. Even amid market lows during the first half of 2020, cryptocurrency-related M&amp;A <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.themiddlemarket.com\/feature\/ma-forecast-2021-cryptocurrency-deals-take-off-as-bitcoin-skyrockets#:~:text=M%26A%20Activity%20Up&amp;text=According%20to%20a%20November%202020,%24400%20million)%20caused%20that%20spike.\">hit<\/a> $600 million, more than the total for all of 2019. All signs point to an even larger year in 2021.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>Will PayPal\u2019s crypto integration bring crypto to the masses? Experts answer<\/em><\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_need_for_due_diligence\"><\/span>The need for due diligence<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Of course with M&amp;A, IPOs and capital raises also comes the need to conduct due diligence, market assessments and valuations. But when cryptocurrency is involved as the primary asset or a key asset, there are additional, complex layers to standard due diligence processes. <\/p>\n<p>Buyers and target companies need to consider conducting a technical assessment of the digital assets at play. Potential buyers will want to know how to verify the cryptocurrency assets and ensure that the target company\u2019s reported assets are accurate. Because cryptocurrency companies often operate under unconventional business models, and due to the very nature of distributed ledger systems, it\u2019s not always clear what\u2019s what. The crux of the issue is to find out about any problems, risks or inaccuracies in a target company\u2019s cryptocurrency assets, framework and business model and whether they have the correct procedures in place to support their crypto-based business activities. <\/p>\n<p>Likewise, cryptocurrency companies that are looking to raise money or sell their business to a larger <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a> or financial services corporation (or file for an IPO) can help position their business by conducting in-depth assessments that will demonstrate their differentiators and value to potential buyers, and support subsequent valuation and due diligence activities.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_nuances_of_the_crypto_space\"><\/span>The nuances of the crypto space <span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Many may not understand the importance of conducting a technical assessment and cryptocurrency evaluation as part of their larger financial due diligence, or that it\u2019s even possible. However, experts in this space are beginning to develop complex methodologies to conduct, fast, in-depth and cost-effective technical assessments of cryptocurrency assets and leverage digital forensic investigation techniques to sample and verify digital wallet ownership, digital asset ownership, as well as verify assets under custody, and the value and validity of assets. <\/p>\n<p>Additional areas that buyers should examine in a crypto-focused technical assessment include:<\/p>\n<ul>\n<li>The full scope of digital asset holdings, including hot wallet services, cold wallet storage, business wallet services, portfolio management and other services. <\/li>\n<li>Size, locations, duties and other key details relating to technical and sales support, and development teams.<\/li>\n<li>Risks within cryptocurrency-related contracts, privacy, security, Know Your Customer, Anti-Money Laundering, signatures and other policy controls.<\/li>\n<li>Code audits across wallets, user interface and <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>lication programming interfaces.<\/li>\n<li>Governance implications (such as regulatory requirements and standards including the United States government\u2019s <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.acq.osd.mil\/cmmc\/index.html\">Cybersecurity Maturity Model Certification<\/a> and the European Union\u2019s <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/gdpr-info.eu\/\">General Data Protection Regulation<\/a>).<\/li>\n<li>Technical structure and stability.<\/li>\n<li>Third-party partnerships, data use and obligations. <\/li>\n<li>Research and development projects and developmental coin\/token support.<\/li>\n<\/ul>\n<p>In addition to traditional financial due diligence and valuations that accompany fundraising and M&amp;A transactions, buyers in this space will also need to validate and assess the technical elements of the target company\u2019s cryptocurrency assets and structures. Doing this right will require the support of a domain expert in blockchain and cryptocurrency who understands the technical complexities and knows what questions to ask. Cryptocurrency remains an enigma to many people, but a thorough, expert-driven technical audit can reveal risks and eliminate guesswork to support the execution of high-value, disruptive deals.<\/p>\n<p class=\"post-content__disclaimer\"><em>The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Steven S. McNew<\/strong> is a senior managing director within the technology practice of FTI Consulting. In his role, Steven helps clients evaluate and implement blockchain solutions and builds cost-effective, defensible strategies to manage data for complex legal and regulatory matters. Steven is an expert in blockchain, information and data security, complex discovery and digital forensics. He completed studies in blockchain and cryptocurrency at MIT and has led engagements involving blockchain assessments, pilot projects and software selection and implementation. He has also led disputes involving issues related to blockchain and various forms of cryptocurrency.<\/div>\n<\/div>\n<p><template data-name=\"subscription_form\" data-type=\"consulting_newsletter\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. 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M&amp;A activity is expected to rebound quickly \u2014 more than 60% of decision-makers at large companies who were surveyed by FTI Consulting for a February report agree that&#8230;<\/p>\n","protected":false},"author":1,"featured_media":229223,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDQvNDc4YzhmYWEtOTQ1Ny00YWRlLTljNWQtYmEzOWRhZTQ4MDM0LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74859,74894,74863,75141,117,73711,70934,4965],"class_list":["post-229222","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-aml","tag-blockchain","tag-cryptocurrencies","tag-kyc","tag-business","tag-investments","tag-regulation","tag-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/229222","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=229222"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/229222\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/229223"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=229222"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=229222"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=229222"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}