Fintech PR

Crypto-Accountancy leaders, Kyax and Nephos, announce new industry standard to replace current Proof of Reserves attestation

Published

1 year ago

October 19, 2023

The new way to assess crypto companies, KYA (Know Your Assets), has been announced by Digital-Asset firms Nephos Group and KYAX

DUBAI, UAE and LONDON, Oct. 19, 2023 /PRNewswire/ — In a bid to bring greater transparency and trust to the Digital Assets industry, two crypto firms have developed a new way to assess if a crypto business is transparent and financially stable. The two firms, Nephos Group, a leading Crypto-Accountancy firm, and KYAX, a leader in Digital Asset Reporting, argue that the popular ‘Proof of Reserves’ attestation is not fit for purpose and seek to replace it with a new standard called KYA or ‘Know Your Assets’.

Developed over a year in response to the crashes of FTX and other industry giants in 2022, this new methodology seeks to provide a holistic assessment of Digital-Asset businesses’ financial states. Instead of focusing exclusively on “reserves”, it integrates on and off-chain data to analyse the internal systems, liabilities, governance, processes and data involved on the financial side of a digital-asset business, across Assets, Liabilities and Reserves.

Matthew de la Fuente, CEO at KYAX, commented: “The industry’s current go-to attestation for consumer trust is Proof of Reserves – a dangerous and inadequate system which proves very little from an accounting or legal perspective. The potential liabilities, hazardous processes, and lack of general safeguards that many crypto firms have are completely ignored. Moreover, consumers don’t seem to know that accountants, attestors and auditors often don’t sign off on the financial data itself. The industry relying on this framework is an accident waiting to happen.”

He added: “By joining forces with Nephos Group we were able to work out the exact factors required by Accountants, Auditors & Consultants to assess the overall state of any web3 Business or Crypto firm. The new KYA system will permit Businesses, VCs, Governing Authorities and Customers to engage with counterparties, faster, more efficiently and, most importantly, with increased confidence and transparency.”

Joe David, Founder & CEO at Nephos Group, commented, “As firm believers in the industry, we know being able to truly attest to a client’s financial position in an accurate manner was essential to the growth of the space. By working with KYAX we’ve developed a new methodology where the whole business model of a digital-asset firm is reviewed. Our 15 years of experience in accounting combined with KYAX’s web3 Data Subledger & Reporting Engine will allow professionals to offer a genuine, holistic seal of confidence to crypto firms.”

Both Nephos Group and KYAX will be launching the KYA methodology to the wider crypto industry later this year as their smart contract infrastructure continues to evolve.

About Nephos / MYNA
Nephos Group is a leading professional services firm specialising in Accounting for the crypto and blockchain sectors. Known for our early adoption of emerging technologies, we offer a comprehensive range of services that include crypto tax planning, crypto accounting, institutional support, and decentralised finance (DeFi) consulting. Our team of experts combines traditional accounting skills with deep knowledge of the digital asset space, providing clients with innovative solutions for compliance and growth in this rapidly evolving market.

About KYAX

KYAX is a venture backed, web3 native Business, Audit & Regulatory Digital Asset reporting engine that helps data-constrained Digital Asset companies get the right data, into the right hands, with the right reports. KYAX’s products are built to SOC 2 Type 2 and ISO institutional grade standards, aggregating Google Sheets, Custom Back Office, Blockchains, CeFi & DeFi transactional data, providing reliable & timely reporting for the most compliance aware Crypto Transactors, including: Asset Managers, Exchanges, Trading Desks, Stablecoins, Prime Brokers, Custodians, Accountants, Regulators & Audit firms.