Digital assets have quickly risen from fringe curiosities to mainstream business opportunities for many public companies. These assets rely on blockchain technology, a decentralized, immutable ledger system that records transactions securely and transparently across a network of computers. They offer the potential to increase efficiency, reduce transaction times and costs, and enhance transparency.

The potential corporate use cases for digital assets are many and varied. Some companies may seek to hold cryptocurrencies as part of their treasury portfolio, anticipating appreciation or hedging against currency depreciation. Others may invest in blockchain infrastructure to improve payments and internal processes, enhance identity verification and cybersecurity, or enable new customer services. Alternatively, a company may tokenize assets such as real estate, intellectual property or supply chain goods, unlocking liquidity and new revenue streams.

In addition to potential benefits, digital assets also carry unique risks. Digital asset prices can be volatile, with potential consequences for financial results and shareholder value. Some digital assets may be difficult to liquidate at fair value, especially during periods of market stress or regulatory uncertainty. Such assets may also be vulnerable to hacks, theft and loss.

The treatment of digital assets under accounting standards, tax laws and other regulations is complex and evolving, requiring specialized expertise. Boards must therefore strike the right balance between innovation and appropriate diligence and oversight. As adoption of digital assets expands, public company boards must keep pace with their companies’ digital asset-related activities and pay close attention to the evolving regulatory landscape. Below, we highlight specific issues that boards should keep top of mind when overseeing digital asset strategy and governance.

Board Expertise and Training

First and foremost, boards should cultivate expertise in digital asset matters, either by developing their own knowledge or by recruiting members and advisors with specialized experience in blockchain technology. The fast-paced nature of the digital asset ecosystem means best practices may shift rapidly, and staying up to date is vital. Therefore, public companies should mandate regular training for board members and executives on the latest trends, risks and legal developments related to digital assets.

Strategic Alignment and Governance

With the necessary expertise in place, boards should carefully evaluate how digital assets and blockchain technology fit within the company’s overarching strategies, objectives and risk tolerances, weighing the benefits of innovation against the unique risks. Boards should ensure that all digital asset-related activities are governed by written policies specifying operational controls, acceptable assets and uses, reporting requirements, risk limits, and escalation and approval protocols. The alignment of digital asset activities with a company’s strategic objectives is an ongoing process, requiring regular reassessment and adjustment as circumstances evolve. Policies and controls should be reviewed regularly and updated based on market changes, regulatory updates and shifts in company strategy. Boards should also carefully review all major decisions concerning acquisitions, divestitures or strategic partnerships involving digital assets, to confirm that such actions align with the company’s core mission and objectives.

Regulatory Landscape

No area of the law is changing more rapidly than the regulation of digital assets. Numerous federal agencies shape public companies’ regulatory requirements relating to digital assets in different ways, and the role of each agency is evolving. The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), which are the primary regulators of U.S. digital asset markets, typify this evolution, as both agencies in the last year have softened prior hardline enforcement stances and now emphasize regulatory guidance over enforcement actions.

The SEC’s Crypto Task Force has been instrumental in this shift, issuing no-action letters, interpretive statements and FAQs to clarify the interplay of U.S. securities laws and distributed ledger technology. Multiple bills are currently pending in Congress that would further change the regulatory landscape, including the CLARITY Act passed by the House of Representatives in July 2025, which would establish the CFTC as the primary regulator of digital assets and impose new compliance requirements on certain companies dealing in digital assets.

With respect to stablecoins (a type of digital asset designed to hold a stable value, often pegged to the U.S. dollar), President Trump signed the GENIUS Act in July 2025, which creates a new comprehensive legal framework for the regulation of this asset class. Multiple federal agencies will play key roles administering the GENIUS Act, including the Federal Reserve Board, Federal Deposit Insurance Company, and Office of the Comptroller of Currency. Digital assets may also implicate regulatory issues relating to anti-money laundering (administered by the Financial Crimes Enforcement Network), sanctions (administered by the Office of Foreign Assets Control) and taxation (administered by the Internal Revenue Service), among many others.

Public company boards must ensure compliance with all applicable laws and regulations impacting its digital asset activities, and failure to do so may result in significant financial penalties, reputational damage and even criminal liability. To ensure compliance, boards should establish robust legal and compliance functions to monitor, detect and respond to legal risks and regulatory developments; work closely with legal and compliance teams; and consult legal counsel before entering into significant digital asset transactions, partnerships or investments.

Cybersecurity

Cybersecurity should also be top of mind for public companies engaged with digital assets, which are uniquely susceptible to loss through hacking or fraud. Boards should ensure that policies for data protection, privacy and cybersecurity are regularly updated to address the challenges posed by digital assets. In crafting such policies, boards should carefully consider the full range of custody solutions (e.g., self-custody or third party; on- or off-chain; hot or cold wallet) and conduct regular audits to ensure company assets are appropriately safeguarded.

Communication with Management

Communication with management is also essential. Boards should require company management to provide regular, comprehensive reports on digital asset activities, including current holdings and valuations, exposure to price volatility and other performance metrics; risk assessments, particularly in relation to cybersecurity, regulatory compliance and audit findings; and upcoming opportunities and challenges.

Stakeholder Engagement

Likewise, board members should facilitate the company’s communications with stakeholders, including investors, who increasingly seek clarity on how digital asset initiatives align with the company’s mission, values, and long-term objectives. Boards should be prepared for pointed questions about the rationale behind digital asset holdings, risk management strategies employed and steps taken to ensure regulatory compliance and security.

Proactive communications foster trust, demonstrate a commitment to responsible stewardship and may deter activists from framing digital activity as speculative, risky or outside the company’s core mandate. Boards should therefore encourage management to host regular briefings, Q&A sessions and educational workshops to keep stakeholders informed as regulations, technologies and market conditions evolve.

Activist Preparedness

As public attention to digital assets intensifies, activist investors may target companies based on their digital asset strategies, either criticizing a company for engaging in what they view as speculative or off-mission activities, or, conversely, pressing companies to embrace digital asset opportunities more aggressively. Disclosure gaps, unclear valuation methods or sudden swings in asset prices may be cited by activists as evidence of governance failures. Boards should anticipate and prepare for activist scrutiny by ensuring all digital asset holdings are disclosed transparently in financial statements and public filings; providing clear, accessible explanations for the valuation methodologies; and monitoring media, investor sentiment and regulatory signals to preempt potential controversies.

Activist campaigns may also focus on whether directors possess adequate expertise to oversee digital asset activities, whether governance structures appropriately address the unique risks of digital assets or whether management’s digital asset strategy serves shareholders’ long-term financial interests. Boards should develop a comprehensive activist response playbook that addresses digital asset-specific scenarios, identifies key talking points and supporting data and designates spokespersons prepared to engage with activist concerns. Regular engagement with major shareholders on digital asset strategy—before any activist emerges—can help boards understand investor sentiment and address concerns proactively.

Shareholder derivative litigation is another risk boards must consider. Recent years have seen an increase in derivative actions alleging that directors breached fiduciary duties by failing to implement adequate oversight of emerging risks. In the digital asset context, plaintiffs could allege that directors failed to monitor cybersecurity vulnerabilities, compliance with evolving regulations or the impact of volatile asset prices on the company’s financial health. Boards should document their digital asset oversight activities carefully, including preparing and retaining robust meeting minutes, expert consultations, policy reviews and risk assessments, to demonstrate prudent decision-making practices and reduce exposure to such claims.

Conclusion

As digital assets become more deeply embedded in more aspects of business, boards must be proactive, informed and adaptive. Companies should prioritize maintaining high standards of oversight, aligning digital asset activities with company objectives, ensuring transparent reporting, working closely with legal and compliance teams and engaging with stakeholders, including potential activists. With a deliberate, well-governed approach, boards can harness the transformative potential of blockchain technology while safeguarding value and reputation.