In a recent filing, Reddit, an online community center, disclosed that it liquidated most of its crypto assets during the third quarter. The company stated that the financial consequences of this transaction were “immaterial” during that time.
The company stated that it acquires specific cryptocurrencies for its product and engineering teams, with their use restricted to specific applications.
Reddit previously allocated a portion of its surplus funds to Ether and Bitcoin. Currently, the platform is acquiring Ether and Matic to pay for transactions involving specific virtual items.
Reddit disposed of all Bitcoin and Ether previously held for “treasury purposes” by September 30, 2024. Nevertheless, it suggested that it may continue to acquire additional cryptocurrency in the future.
“Reddit has held cryptocurrencies and experimented with blockchain technology and may continue. This may expose us to exchange risk and additional tax, legal, and regulatory requirements.”
Reddit Announces Board-Approved Crypto Investment Strategy
The social media company disclosed its crypto holdings earlier this year after filing with the SEC to go public under the “RDDT.”
According to its filing, Reddit’s investment strategy necessitates board approval for new cryptocurrency ventures.
This policy restricts treasury investments to Bitcoin, Ether, and other crypto assets that regulatory bodies such as the SEC or CFTC, or their top officials, have specified may not be securities.
However, Reddit stated that it bases these decisions on its risk assessments, which are guided but not limited by regulatory signals.
2023, the organization will implement a fair market value standard for cryptocurrency
Additionally, Reddit intends to implement a novel accounting standard in 2025. This update necessitates that cryptocurrencies be reported at their current fair market value instead of their initial cost basis.
According to Bitcoin Treasuries, the most significant corporate holders of Bitcoin are Marathon, Riot Platforms, MicroStrategy, and Tesla.
