Utility Token Accounting
How to account for Filecoin, Siacoin, Civic, Golem, and other utility tokens
A utility token is a token that allows users to do certain operations in a specific ecosystem. Utility tokens are typically pre-mined, meaning all tokens are created at once and dispersed through an ICO or another mechanism chosen by the developers. By issuing the utility token an entity is essentially issuing a digital coupon redeemable in the future to receive access to a product or service provided by the entity. Utility symbols are not used as investments and usually can only be used in applications integrated with specialized utility token wallets. Examples of utility tokens are Filecoin, Siacoin, Civic, Golem, etc.
Utility token accounting under US GAAP will be different from accounting for cryptocurrencies used as means of exchange. If the company purchases utility tokens for its intended purpose (i.e., to access the service or product in the future), they should be accounted for as Prepaid Expenses. Utility tokens in essence are deposits to purchase goods or services. Utility tokens, therefore, need to be carried at the amount paid and charged to the respective cost account if the option is exercised.