Petri Basson CA(SA) quickly realised during articles that technology would have a massive impact on the accounting industry and that he would have to upskill himself to keep up with it. Even today, he says, things are changing so fast, one can never just sit back and rely on your existing knowledge. He has become an avid learner cultivating a habit of continuous learning.
Building digital companies from the Cayman islands
‘Many people are intimidated by the pace things are changing, but I see massive opportunity in that. This can apply to the entire financial industry, but also applies to something as easy as how we reconcile accounts and pass journal entries in the accounting practice,’ says Petri Basson.
Besides his CA(SA) qualification, Petri boasts six IT certificates through Rhodes University behind his name, as well as Certified Information System Auditor (CISA) and Certified Bitcoin Professional (CBP) qualifications. And has just recently completed his Crypto Currency Security Standard (CCSS) certification, which will be going public in the next few months. He is also the chairman of the Blockchain Association of the Cayman Islands (BACI) and Crypto Currency Security Standard (CCSS) steering committee.
THE CA(SA) SWEET SPOT
‘I think for any CA(SA) the sweet spot in their career is where their CA knowledge and their passion intersects. If your passion is fashion, sport, crypto or whatever it may be, apply your skills in that industry and bring your unique perspective to it. Always keep on learning new skills and finding new ways to iterate and improve,’ says Petri.
Today he resides with his wife in the beautiful Cayman Islands and is making international waves with his digital companies. Here’s more about him …
Tell us about your various digital companies?
I currently have a few different companies and titles, all focused on the digital asset industry. I am co-founder and owner of Hash Data − a digital asset data collection and normalisation tool focused on making it easy for firms to adopt digital assets and account for them. The tool can currently pull data from 14 centralised exchanges, four blockchains and multiple decentralised finance (DeFi) protocols to make it easy for accountants to keep track of multiple sources where clients are transacting.
Hash Consulting is a digital asset consulting company helping firms reach the next level in maturity. They work with decentralised autonomous organisations (DAOs), hedge funds and operating companies to develop their custody solutions and policies and procedures. We also consult on accounting treatments, treasury functions and several other services.
Provenance is a compliance firm with a focus on digital assets helping clients navigate and comply with the complex KYC/AML environment in the digital asset industry. We fulfil outsourced compliance roles and help with client onboarding and AML policies/procedures.
Tell us briefly about your current role?
In my current role I’m working on building out our companies that service the growing digital assets industry. We are a 100% remote company with people across the world. This brings its own challenges, but it’s great to work on ways to re-imagine the way companies can operate remotely.
It’s very exciting to work with our clients to develop the future of finance.
Through our tools and consulting services, we help our clients to ensure they are implementing industry leading practices and taking all the risk in the industry into consideration.
Our work with DAOs is some of the most interesting engagements we currently have and it’s very exciting to take lessons learned from a traditional corporate background and implement them in these new decentralised organisations in new ways.
How has the combination of you CA(SA) designation and IT skills given your career a boost?
I think the combination has helped me to be an interpreter between the technology and financial world. I could speak both languages and bridge the gap between what the accounts were saying and what the developers could practically do and how the code worked.
It is becoming even more prominent now that we consult on accounting for digital assets and decentralised finance (DeFi). Often, the real issues arise where the accounting team doesn’t understand how something is working and try to do accounting based on incorrect assumptions. If you can explain something to them in terms they understand and give practical examples, they understand it and can make the correct adjustments.
I think this is also where the accounting standards are lacking at the moment. All digital assets have been put under one large umbrella, but there are countless nuances in how different assets work and how they should be accounted for.
You have developed a number of audit tools. Tell us more?
When I was still in audit, we faced the issue of how to confirm assets that were held on a decentralised blockchain or with custodians and exchanges who were not familiar with traditional finance and the confirmation process.
For blockchains, we developed block explorers and signature tools which could be used to confirm ownership of assets and pull balances and transactional data independently from public sources. For centralised exchanges, we developed application programme interfaces (APIs) which could be used to pull data for a specific client, similar to a confirmation from a bank.
We had to support these tools with a lot of additional testing and memos to explain our approaches, but this is just one example of how the financial industry needs to keep up with technology. PDF-based confirmations are impractical and can be easily manipulated. With APIs, independent connections can be made to a service provider and data can be pulled throughout the period. When you are dealing with millions of rows of data, this problem is even more pronounced, and an API is the only practical way to pull information. This is not only a practical solution but saves a lot of precious time so that we can focus on more important tasks at hand.
We are currently also working on the Crypto Currency Security Standard (CCSS) with the CryptoCurrency Certification Consortium (C4). This will become a standard for auditing digital asset custody services. The current frameworks do not provide for the cryptographic specific requirements around private key generation, storage, usage, etc. This standard will, for the first time ever, provide a framework against which custody can be tested, peer reviewed and a certification issue for any organisation which custodies digital assets.
I think cryptocurrencies and digital assets are the future. It’s amazing to see the innovation in this space and all of it is happening in a very transparent manner.
There is still a long way to go for the regulator to understand the space, standards to be developed and KYC/AML solutions to be built. However, there are lots of very clever people working on these solutions.
What is a simple way for one to get knowledgeable about crypto, etc?
My best recommendation is always to get involved in the process. Register on an exchange, complete the KYC process, and buy some bitcoin or Ethereum. If you want to understand custody, set up your own wallet and transfer a small amount of assets to that wallet.
After this, you will probably have a lot of questions and there are great resources on Medium and YouTube to seek out answers. Find someone that explains things in a way that is easy to understand, and always do your research and read up on anything you are considering investing in.
Tell us more about your move to the Cayman Islands?
I moved to the Cayman Islands at the end of 2014. I had a friend who was working here, and she asked me whether I wanted to do an interview. I had my first interview on a Monday, the second interview on the Thursday, and had an offer by the Friday afternoon. Within two months I got married and then moved to Cayman. I started out in the Insurance team, but then moved to the IT Audit team and from there helped to set up the Digital Assets practice.
Cayman is a great place to live. You do, however, work very hard and it’s not all sunshine and beaches. I recall in my first few months here realising that I’d been on the island for four months and only been to the beach twice because we were so busy and working so hard.
What do you enjoy most about the Cayman lifestyle?
It will definitely have to be the weather. I am not a fan of winter, and a cold day in Cayman is 20 degrees Celsius. There are lots of activities on offer on the island, including great beaches and water sports.
The second will have to be the people. They are very friendly and there is a great expat community on the islands. Because it only has 65 000 people, it has a small town feel without being too small.
Where do you see yourself in five years’ time?
Hopefully continuing to build out solutions for this industry and solving new problems. We are still very early in the digital asset industry and there is a lot of room for growth.
What do you think is a key skill every CA(SA) should possess?
I would say continuous learning. Fifty years ago a CA(SA) had acquired unique knowledge after a seven-year qualification process that was not easy for anyone else to access. These days information is freely available on the Internet, and anyone can research those points. As a CA(SA) it’s your job to stay up to date and find new, unique ways to apply your knowledge in whichever industry you are working.