AP Karina Proshina
As the founder and CEO of CAG Advisors, Andrea Perlak has carved out a niche in the complex world of accounting for innovative and financial tech companies. With an impressive background that includes roles such as Board Member, Board Advisor, World Bank Senior Lead, CFO, CAO, Controller, and Big 4 Manager, Perlak brings a wealth of experience and expertise to the table.
Building Expertise in a New Frontier
CAG Advisors provides comprehensive bookkeeping, accounting, and CFO advisory services tailored to the unique needs of fintech companies. The firm’s clientele includes a diverse array of organizations, such as digital banking platforms, fintech startups, DeFi protocols, metaverse projects, DAOs, and any entity dealing with NFTs, trading, or mining. Additionally, CAG Advisors offers fund administration and accounting services for fintech-native or adjacent funds.
Perlak’s journey into digital assets was driven by a recognition of a significant gap in expertise within the field. “The reason we started is because we felt there was a lack of expertise in the area. We take a unique approach to serving our clients. We first understand their product, then the regulatory environment, and then the accounting. Understanding the underlying tech of our client’s products is fundamental,” she explains.
Bridging the Gap Between Innovation and Regulation
The world is rapidly moving toward a future dominated by financial tech and digital banking technologies. However, this swift pace of innovation has created a significant disconnect between the technological advancements and the existing regulatory and accounting frameworks. Perlak highlights this challenge, stating, “It is a significant challenge to have a functional tax and accounting function within the digital environment, given the current regulatory system and accounting software supporting this sector. Fintech is where the world is headed but at the current moment, proper accounting and tax treatment requires a deep understanding of both the product and the global regulatory environment. It is far from automated.”
Understanding the Product and Evaluating Investors
Perlak believes that an important step in addressing the accounting challenges faced by companies is by having a thorough understanding of the product. “What are they building? We need to first understand the product and the tech behind the product,” she emphasizes. This involves not only grasping the technical aspects of the product but also using it in practice to fully appreciate its functionality and potential.
Another important step involves evaluating the nationalities and citizenships of the people involved in the company. This includes founders, board members, employees, and contractors. “The regulatory and tax implications can vary greatly depending on where the key individuals are from,” Perlak notes. This step is crucial in determining the most favorable jurisdiction for the company’s operations.
Determining the Regulatory and Accounting Environment
Perlak’s team assesses the regulatory and accounting environment based on the specific nature of the company’s operations. For instance, the regulatory environment for a DeFi protocol can be vastly different from that of a Bitcoin mining company or a centralized exchange. “If it’s a DeFi protocol, what is the regulatory environment? What are the implications if it’s a centralized exchange with no headquarters? If it’s a Bitcoin mining company, should they remain in Texas or expand to Africa or the UAE?” she explains.
Perlak’s approach ensures that each company’s unique circumstances are thoroughly evaluated to determine the best path forward. This method addresses current challenges and positions companies to thrive as digital assets rapidly evolve.
Overcoming Barriers to Adoption
Despite the clear trajectory toward a digitized economy, Perlak acknowledges that adoption has been slow, particularly in the United States. “Many don’t understand the cutting-edge nature of this technology. I was speaking to congressional members and one of my fellow panelists implored members for fintech-friendly legislation. When he was on leave from Afghanistan, he couldn’t use his debit or credits cards. Instead, fintech was accepted just about everywhere. In the U.S., we are behind because there is no necessity. But when you have an inflation rate like Argentina or El Salvador, the necessity becomes clear,” she explains.
Looking Ahead
Andrea Perlak’s vision for the future of accounting in the fintech space is rooted in a deep understanding of both technological innovations and regulations. By bridging these two worlds, CAG Advisors is not only addressing current challenges but also laying the groundwork for a more integrated and efficient future. As the digitized economy continues to dominate, the expertise and forward-thinking approach of leaders like Perlak will be crucial in navigating this transition.
Learn more about CAG Advisors by visiting their website.
