Audit Considerations for Crypto-Related Businesses in Singapore
As Singapore positions itself as a global digital asset hub, more companies in the blockchain and crypto space are choosing to incorporate locally. From exchanges and wallet services to token issuers and DeFi platforms, crypto businesses are gaining momentum. However, with growth comes scrutiny — especially when it comes to audit, tax, and compliance requirements.
In this article, we explore the key audit challenges unique to crypto-related businesses in Singapore and how you can prepare to meet them proactively.
Why Crypto Companies Face Unique Audit Challenges
Unlike traditional businesses, crypto operations deal with:
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Real-time, decentralised transactions
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Volatile digital asset valuations
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Complex smart contracts
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Pseudonymous users and wallets
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Rapidly changing compliance landscapes
As a result, standard audit practices often fall short. To maintain regulatory confidence, crypto companies must adopt enhanced controls, documentation, and accounting systems that meet audit standards.
Is a Statutory Audit Required in Singapore?
Yes — if your crypto company is incorporated in Singapore and exceeds the audit exemption threshold, an annual statutory audit is required under the Companies Act.
You qualify for exemption only if all three conditions are met:
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Private company status
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Part of a small group (if applicable)
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Two of the following:
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Total revenue ≤ SGD 10 million
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Total assets ≤ SGD 10 million
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Employees ≤ 50
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That said, many crypto businesses voluntarily undergo audits even when exempt. This is particularly common among those seeking licensing, external funding, or participation in regulated financial ecosystems.
Key Areas to Prepare for Audit
1. Digital Asset Valuation and Custody
Auditors will focus on:
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How your company values crypto holdings (e.g., market value at reporting date)
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Where assets are stored — exchange wallets, cold wallets, or custodians
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Who holds access and how private keys are managed
For example, if you use a third-party custodian, you should maintain verifiable documentation of wallet addresses and asset control policies. This builds trust in the figures presented on your balance sheet.
2. Revenue Recognition
Crypto companies earn income through staking, trading, token sales, gas fees, and more. However, these models can be difficult to account for correctly.
To ensure accurate reporting:
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Categorize revenue by type (e.g., transaction fees vs. token issuance proceeds)
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Match income with performance obligations under the Singapore Financial Reporting Standards (SFRS)
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Record income consistently across periods
For instance, if your platform earns staking rewards, auditors will expect to see timing and valuation methodologies clearly defined.
3. Transaction Traceability and Audit Trail
Auditors need evidence — even if your business operates on decentralised platforms.
Therefore:
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Maintain internal records of all crypto transactions
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Align transaction logs with blockchain explorers
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Use tagging systems to identify counterparties and source of funds
Tools like Chainalysis or Etherscan can help validate activity. However, your internal audit trail must also show how on-chain activity maps to your books.
4. Token Issuance and Capital Treatment
If you’ve conducted a token sale, your auditors will evaluate:
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Whether the tokens represent revenue, deferred income, or equity
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How token proceeds are recognised in your financials
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Vesting schedules, lock-ups, and smart contract terms
For example, a governance token sold during a crowd sale may require deferred revenue treatment until the related obligations are fulfilled.
5. Internal Controls and Governance
Crypto firms are often lean and agile, but weak governance is a major audit risk.
You should implement:
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Clear access controls to wallets and platforms
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Segregation of duties for trading, finance, and IT functions
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Policies for onboarding clients and screening transactions (AML/KYC)
This becomes especially critical if you’re regulated by the Monetary Authority of Singapore (MAS) under the Payment Services Act.
6. Regulatory Licensing and Reporting
Some crypto businesses must register or obtain licenses, particularly if they offer:
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Digital payment token (DPT) services
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E-money issuance
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Money transfer services
If licensed under MAS, you must:
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Maintain audited financial statements
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Submit periodic reports
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Ensure compliance with AML and cyber hygiene regulations
Failure to meet these obligations can result in regulatory penalties and reputational damage.
Common Audit Issues in Crypto Businesses
Many audits are delayed or flagged due to:
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Missing documentation for wallet transactions
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Inconsistent valuation of crypto assets
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Poorly classified revenue and capital inflows
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Lack of smart contract audit logs or governance policies
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No reconciliation between crypto balances and fiat bank accounts
Being prepared can prevent unnecessary delays and help you maintain credibility with stakeholders.
How USAFE Supports Crypto-Related Companies
At USAFE, we bridge the gap between blockchain innovation and financial compliance. Our crypto-specialised audit and advisory services include:
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Statutory and voluntary audits tailored to token-based businesses
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Transaction tracing and crypto wallet verification
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Accounting treatment for token sales and staking income
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Internal control assessments for wallet and treasury systems
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Licensing support under Singapore’s Payment Services Act
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FRS-compliant financial reports for investor and regulatory use
We partner with founders and CFOs to ensure that audit readiness doesn’t hold your growth back.
Final Thoughts
Crypto and blockchain businesses operate at the cutting edge — but financial reporting and compliance cannot be an afterthought. As Singapore sharpens its focus on digital asset regulation, the ability to present clean, auditable financials is more important than ever.
Running a crypto business in Singapore?
Speak to our audit and advisory team at USAFE to ensure your structure, documentation, and controls are built to withstand scrutiny — and inspire confidence.
Disclaimer: This article is for informational purposes only and does not constitute any professional advice. Feel free to contact us to consult with our professional advisors team for personalized advice and guidance.
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