Cryptocurrency, Treasury, and Fraud: Safeguarding Your Payments in a Digital World

As cryptocurrency becomes a more common payment method for businesses, fraudsters are evolving faster than ever, especially through Business Email Compromise (BEC) scams. In this episode, global treasury executive Lee-Ann Perkins shares her insights on how organizations can safely navigate cryptocurrency payments, project treasury operations, and leverage strategic technology to minimize risk.

With 20+ years of experience leading treasury operations across multiple industries and countries, Lee-Ann discusses real-world examples of cryptocurrency fraud, the risks tied to private keys and wallet security, and actionable strategies to safeguard your company’s digital payments.

Whether you’re exploring cryptocurrency for cross-border transactions, vendor payments, or customer receipts, this episode provides essential guidance for treasury and finance professionals looking to stay ahead of cybercriminals in a rapidly evolving financial landscape.

Click here to access the article: Business Email Compromise (BEC) Has Evolved to Cryptocurrency Payments: How to Stay Safe

Lee-Ann Perkins

Lee-Ann Perkins is a global treasury executive and business partner with 20+ years of strategic experience in companies across the Energy, Aviation, Construction, Manufacturing & Retail, and Business Consulting sectors.  As a certified Treasurer in the U.S., UK, and Canada, Lee-Ann Perkins has been repeatedly hand-selected by CEOs and CFOs to enable aggressive organic and inorganic global growth. Including M&As and IPO, establish, harmonize, and scale multi-jurisdictional Treasury Operations and Compliance Programs, and create operational cost savings through AI innovation and automation of Treasury Management Systems. She is frequently invited to share her Treasury and IPO knowledge with global conference, podcast, and print audiences.

Debra Richardson

Debra is an Accounts Payable speaker, consultant, and trainer with over 20 years of experience in AP, AR, general ledger, and financial reporting for Fortune 500 companies including Verizon, General Motors, and Aramark.

For over a decade, Debra has focused on Global Vendor Maintenance, and implemented a vendor self-registration portal for 140k+ global vendors across seven ERPs. In her consultancy, she focuses on authentication techniques, internal controls and best practices to prevent fraud in the vendor master file.  She is the President of the Central Atlantic Region IOFM Chapter and the IOFM Ask the Expert for the Vendor Master File Category.

A Certified Fraud Examiner (CFE), Debra works with vendor management teams to clean their vendor data and update their vendor processes so they pay the right vendor.

She has a YouTube channel where she posts vendor master file tips every Tuesday and hosts a weekly podcast: “Putting the AP in hAPpy”.

Grace Chlosta
Senior Content Manager, IOFM

Grace is the Senior Content Manager at the Institute of Finance & Management (IOFM), where she has led content strategy and development since 2022. In this role, she oversees all aspects of IOFM’s digital and event-based content, ensuring it remains timely, relevant, and actionable for all financial operations professionals.

Grace manages IOFM’s robust library of site content, leads the organization’s editorial and member webinar programming, and hosts IOFM’s podcast series. She also oversees a team of subject matter experts who contribute thought leadership and educational articles. In additional, Grace curates and manages all speaker content for IOFM’s in-person and virtual events, ensuring consistency and quality across every touchpoint. With nearly three years in the role, Grace brings a deep understanding of the financial operations landscape and a passion for delivering content that empowers professionals to excel in their roles.

Transcription

Grace Chlosta: Welcome to the IOFM podcast. This is a podcast for accounts payable and accounts receivable professionals who want to stay in the know with current AP and AR trends and ideas. We'll be interviewing professionals in this space on a wide variety of subjects, including automation, artificial intelligence, career growth, compliance, leadership, and much more.

Hey, Debra. How's it going? 

Debra Richardson: It's going just fine, Grace. How are you?

Grace Chlosta: I'm doing good, enjoying summer so far. Happy to have you back on the podcast.

Debra Richardson: Thank you. Love to be on the podcast.

Grace Chlosta: We actually have a little bit of a different format here today, so you actually have the chance to interview someone else for the podcast for us. So give us a little bit of a background on the topics that we chose to discuss for the episode today, why that's important, who you interviewed, just a little bit of an intro to get us ready for the conversation as a listener.

00:01:09                                 

Debra Richardson: Yeah, and let me tell you, it was a great conversation. She's a practitioner, and you know how busy they are, so you have to record 'em when they're available. But really excited about this. I don't talk about it often, but when I was over vendors, for a portion of that time (almost three years), I was also over payments. And so very interesting to talk about, right, this developing cryptocurrency, digital-payment option for AP in making payments and AR in receiving payments.

00:01:50

The biggest requirement to do that is to create a cryptocurrency wallet that both AP and AR would need to do in order to make and/or receive cryptocurrency payments. And so that is what I talked to my guest about. Her name is Lee-Ann Perkins, and she's a treasury practitioner. She did just that, created a cryptocurrency wallet, and she walks through an eight-step process not only to enable cryptocurrency transactions, which is what she did, but also to avoid fraud. 

What's so funny, Grace, is that it happened the same way that everything happens in AP. It was something that -- and actually in AR, too, but it was something that another department came up with and just said, "Hey, go ahead. Set this up." 

00:02:56                     

Grace Chlosta: Right? That's how it always happens, right?

Debra Richardson: That's how it always happens. But you know what? I think it happens like that for a reason, because don't we always get it done?

Grace Chlosta: Oh, you do, yes, absolutely.

Debra Richardson: And she did. She got it done, and she put it in a very organized order for it to be done. She explained why. So it really is a great interview.

Grace Chlosta: This is so awesome. I'm so awesome that she had the time to do it, and to really listen and to absorb all of that info. And you also had a chance to write an article for us that's already live on IOFM.com, about business email compromise and cryptocurrency payments. So give me a little bit of info about that, and then we can head on into the conversation with Lee-Ann.

Debra Richardson: Yeah, and this is kind of how the whole cryptocurrency conversation got started was the fact that I saw for the second year in a row -- and this time it's a little bit higher -- that the fraudsters have added the cryptocurrency digital payment method to their repertoire, right, because they're always evolving, into business email compromise. So it's no longer just ACH or electronic payments, or, for that matter, remittance address for check payment methods.

00:04:23

It has now also evolved into cryptocurrency payments as well. And so in that article, I gave a little background, an overview of digital payment, benefits of cryptocurrency payments, which, again, are a part of digital payments. I talked about that FBI report, and then just how to avoid fraud with this payment method. 

00:04:54

So, again, both the article and the podcast really gives some great information, if anyone is interested in looking at digital payments, specifically cryptocurrency payments, it can be a great option for cross-border payments. So going back and referring to the article -- I'd probably read that first, or it can really be in any order. But I'd probably read that first and then listen to the podcast interview, but it could really be in any order. They're both great sources of information. 

Grace Chlosta: That's awesome. Yeah, we'll be sure to make sure that the article is in the show notes for today's episode.

I think we'll just go right ahead and get into the interview, so enjoy listening, and we'll be there on the other side. 

00:05:42                     

Debra Richardson: So I am here with Lee-Ann Perkins, and today we're going to be talking about setting up, or how she set up, a cryptocurrency wallet. Just a brief, high-level overview, because I will say I am not an expert in cryptocurrency payments. But at a high level, cryptocurrency payments are digital. It's a form of digital payments, just like ACH payments, wire payments, credit card payments, even Zelle or PayPal. Cryptocurrency payments are made via the blockchain.

How you get to the blockchain is you set up wallets, and that's where your cryptocurrency is stored, really just software for storing cryptocurrency and really serves as the digital interface to the blockchain. So that is a very high level. 

00:06:45

But what I wanted to do today was kind of dive into the digital payment that is cryptocurrency, and how accounts payable and accounts receivable can utilize cryptocurrency payments to either -- or cryptocurrency wallets to either make payments or receive payments, and that is where Lee-Ann Perkins comes in today, because she has set up a cryptocurrency wallet in the past, and I believe that was on the AR side, and so she's going to talk about that today. 

Welcome, Lee-Ann. I've kind of already gave away what you're going to be talking ab out, but if you can go ahead and just do a quick intro, and then we can get started on how you set up the cryptocurrency wallet, and how that worked, and some other questions that listeners may have about cryptocurrency payments. 

00:07:47                     

Lee-Ann Perkins: Great, thank you, Debra. It's always so good to talk to you. Good morning to you and to your audience listening. This is always a great [foray] for me to talk about, treasury and any type of payments. Thank you for having me today.

00:08:04

I'm a global treasury professional, have been in treasury for about 22 years in various types of industries, working on both sides of working capital, AP, AR and treasury around the world. I really enjoy the treasury function, and that's why I loved meeting Debra and talking to the audience and helping to provide education around these types of projects that we've done in the past. As you'll listen to my story, I had no idea what a digital wallet was or how to create cryptocurrency wallets when I was tasked with this project. I'm a very curious person. I love to learn. Therefore, doing these types of projects, once it's done and the end result is great, is always such a delight for me. But actually getting to that point is sometimes quite challenging. 

00:08:56

So it's great to be here, helping others learn about this topic, as I learned from others when I put the project into place. 

Debra Richardson: You know what? Hearing how that came about -- and I know we'll get into a little more detail, but isn't that always the case with folks in AP (and probably AR as well), where you just get voluntold for stuff.

Lee-Ann Perkins: [chuckles] I love that word.

Debra Richardson: And then you just figure it out. But you know what? We do, don't we?

Lee-Ann Perkins: We do. And what's always challenging for us is the work in the payments and treasury side is always so time sensitive. And when we're given a project, it's always due tomorrow. We have to go figure it out.

00:09:41

But, because of this community and the people who we learn from, we're able to get these things done eventually, so kudos to us. 

Debra Richardson: Yes. And you know what? That's why I'm so glad we're talking about this subject today, because I know not a lot of practitioners, either in AP or AR, are dealing with this. But, at some point, they may -- just like you did -- get voluntold and have some short timelines. So, hopefully, today's conversation can help those folks that are in that situation, or maybe just want to explore an additional option for digital payments.

So let's go ahead and get started. I'm just going to just ask some basic questions. The first one is: Why did you set up your cryptocurrency wallet? And I think you kind of alluded to it, but go ahead -- 

[Interruption for message: "This audio was created with Podcastle.ai."]

Debra Richardson: -- wallet. And I think you kind of alluded to it, but go ahead and just talk about how it all started.

00:10:53                     

Lee-Ann Perkins: This project came to me from the marketing department at the company I was working at. Cryptocurrency was not the core business model of the company, but we were trying to tap into innovation and hype surrounding crypto at the time. This was a few years ago. This project came to me from the marketing department because they were launching a new product, and they were trying to create buzz and do something unique, something innovative and different in the industry.

Their experiment was to auction one of our products using cryptocurrency. So we would set the auction up, we would create the buzz around it, and then the winning bid would then pay for the product via cryptocurrency. 

00:11:44

And this was just a way to really support that vision that the marketing department had. They wanted to pay attention to the trends that were going on. They wanted to delight our customers, and they wanted to be early adopters. And, therefore, their project ensured that treasury was a stakeholder downstream because we had to set up the wallet, and we had to be able to ensure that the winner of the product would be able to pay in cryptocurrency, and the company would be able to then turn that around into fiat, once the project was complete. 

00:12:21                     

Debra Richardson: Okay. And when you say "fiat," what is fiat? Is that the cryptocurrency in local dollars or local currency?

Lee-Ann Perkins: Fiat currency is hard currency as we know it, U.S. dollars, currencies that we have right now, as opposed to crypto, which is digital or virtual currency.

Debra Richardson: Got it, okay. So marketing probably did not come to AR and say, "Hey, can you do this before we tell everyone we're going to do this?"

Lee-Ann Perkins: [chuckles] Wow, great assumption, which turned out to be entirely correct. The marketing department was working on this project fast and furiously, and I don't think they realized the implications of actually setting up a digital wallet and being able to receive funds in crypto.

00:13:21

They had a short time and turnaround for this project, which meant once it got to the treasury department, it was even shorter and it was crashing the schedule, basically. So we really only had (once we were notified of it), start to finish, eight weeks to make this happen. 

Debra Richardson: All right then. And just as kind of a reminder of what wallets are, the cryptocurrency is stored in the wallet, and then the wallet is really the digital interface to the blockchain network, which actually transfers the funds.

00:13:57                     

Lee-Ann Perkins: Right.

Debra Richardson: All right. So now, I know you talked about there was eight weeks from start to finish, and you had less time than that by the time it came to treasury. So what was the process of setting up that cryptocurrency wallet, and how long did it really take?

Lee-Ann Perkins: The process was for me to start A) figuring out: What is a crypto wallet? What is cryptocurrency? And how do we make this project work for a corporation?

My initial starting point was to reach out to my network. I reached out to my treasury network, to my banking network, and to the broader players in AP and AR that I knew around the world. 

00:14:52

I did not find one person in my network who had done such a project on the corporate side. Of course, this was cause for mild panic at the time, but I knew I had to make this happen, so I had to really shift my thought pattern and just determine that this was going to be a project like any other that I had been given. You need to plan the work and work the plan. 

Meticulously, I went through different internet searches to find out: Who can I contact that would help me with this? I eventually ended up talking to a banker in South Africa, who was a friend of a friend of a friend, who had just recently written a whitepaper on cryptocurrency for corporates. 

00:15:38

This was fantastic because he was so willing to share his information, and to be able to get it out into the broader universe, so to speak, for all of us practitioners. And he also helped me to approach the auditing department with this project. He knew the accounting side of the project, how this was going to be accounted for, the revenue recognition, and what the auditors would be looking for. 

So once I made that contact, I was able to research further. I was able to find a crypto wallet that was able to ensure corporations could transact in cryptocurrency. And then we went through the process of ensuring we had the right stakeholders in the company, which included marketing, who was our project sponsor; treasury, which included risks and controls; the auditing department; legal was very integral to this project as well; and then our IT security. 

00:16:37

So they were all brought in early in the project. I explained what we were trying to do, what help I would need from them, and then basically it went on from there. For me, figuring out: How do I make this work? Who can help me with this? 

I would say that the crypto wallet company -- we ended up using Coinbase for corporate -- they were exceedingly helpful in walking me through, start to finish, how to choose the wallet type, how to vet the custodian, how to complete the KYC on all of these different products, and then how to fund the wallet. I really needed that help from the professionals in that area, and it really became a project with internal and external stakeholders to successfully complete.

00:17:35

From my perspective, on the treasury side, it took us about four weeks, start to finish, from investigation to setting up the wallet to completing KYC, to have the wallet ready for the auction. It was about a four-week process. And that's also because it was my main job. It's what I concentrated on for four weeks, like start to finish. It was a good project, but it was challenging. 

Debra Richardson: Can I say that I love that how you ultimately got to the resource that wrote the whitepaper, that knew the backend accounting that needed to happen for this type of payment -- using your network, I think, is just very critical because, again, that's how you said you were able to get the information that you needed to move forward. And we all have some type of a network, either through LinkedIn or through other associations that we may belong to, that have our peers there.

00:18:46

And I love that you tapped into your network in order to get started or figure out how to get started on this project. 

Lee-Ann Perkins: Yeah, and like I said at the beginning of the podcast, it really is about training and educating others, because I would not be able to do my job if it wasn't for the network that I've developed over my time in the U.S. Debra, that's how we met as well. I have learned so much from you and from your customers and your network, and I just love that we're able to share information. Each one should teach one. That's how we kind of get everything done and keep up with all the changes that are happening in our industry.

Debra Richardson: Yeah, and I feel like it's really a necessity in financial operations and treasury, accounts payable, accounts receivable, because we're always tasked with doing something that is -- what's a great word for it? Not necessarily precedented, right, because even though other folks may have these things in place, every company is different, and so you still have to figure out how to do it with your company, your company processes, your accounting system or ERP.

00:20:09

So it's great to have a network of folks that use your same accounting system or ERP, even though it could be configured differently. It's just great to have a place or a network that you can reach out to that can help you either get started with something, or if even just -- what do you call that? Vet your pain points. [crosstalk] 

00:20:44                     

Lee-Ann Perkins: It's so well said, what you were saying, because it also depends on the industry you work in. This industry I was in when I did this project, I would never have come across this if I was still in, say, oil and gas, or any of the other industries I had worked in. It's very much keeping up with the times, but also keeping up with the industry regulations and requirements as well. So it really is fun because you learn something all the time.

Debra Richardson: Going back to what you were saying, how you set up the corporate crypto wallet, you defined the use case, stakeholders. So you brought in marketing, treasury, accounting, legal, IT, security teams --

[Interruption for message: "This audio was created with Podcastle.ai."]

Debra Richardson: -- accounting, legal, IT, security teams. You chose the platform, Coinbase, for the wallet, and you did your vendor vetting, KYC clients. What are some other things that you needed to set up? How about internal controls, that type of thing, funding the wallet? How do you even do that?

Lee-Ann Perkins: Yeah, and this was the interesting part, too, was setting up the internal controls because what I understood was we would treat this as we would any other bank account. You need to have segregation of duties. You need to have multi-factor authentication. You need to have dual authorization for moving funds, and then ensuring that you do have daily reconciliation and visibility into this account. That's where the knowledge of working with traditional banking accounts was helpful for setting this up as well.

00:22:37

The other thing I did was I opened up my own personal Coinbase account, because I really needed to understand how to transfer funds, what it looked like, start to end, and how I was going to transition this project into the corporate side. And if I didn't know how to do this, nobody else in the company was going to be able to do it. So it really relied on me to understand it. 

00:23:00

So I opened up an account. When I opened it up, Coinbase gave me five dollars to play with, to figure this all out. Today, fortunately, that's worth $101, so that was a good investment. [chuckles] 

Debra Richardson: You did get something out of it.

Lee-Ann Perkins: Right? It's like, there is a free lunch. But it was really interesting because I would move the money in this Coinbase account so that I could see, start to end, what the transaction looked like, how I would find the reference points, once I could confirm the money had been moved from one side to the other, and then transfer it back again. So it really was figuring out for myself.

00:23:44

And then transitioning over to the corporate side, I again relied on Coinbase's corporate department and the experts there to help me actually move the funds from our traditional banking account in fiat, in USD, into the Coinbase account as a little test as well. We just transferred a small amount of money, and they helped me to understand what moving funds across the crypto wallet looked like, how to use ensure the hashtags were compliant on both sides, and then they helped me transition through the whole transfer of funds. 

So it wasn't necessarily intuitive for me at the time, when I was first starting this up. But the more I practiced and the more I got to look at their systems and the dashboard they provided, the easier it was for me to understand. 

00:24:42

As a visual learner, I really could only do it by -- I could only understand it by doing it myself. 

Debra Richardson: By doing it. So it was kind of like your sandbox, really.

Lee-Ann Perkins: That's right.

Debra Richardson: So I'm wondering if I just took a break real quick right now and went and set up my own Coinbase wallet, I get my five bucks, and five or ten years from now -- [crosstalk]

Okay, so that was great. So you worked with Coinbase to figure out how to -- after you did some test transactions, really to figure out how to fund the wallet by transferring currency or transferring funds from your bank account, from the company's bank account. And then what was the next step? 

Lee-Ann Perkins: Then we had to work with our IT department and Coinbase to add crypto as a checkout option to the auction that we were setting up. Coinbase again helped us to ensure they had the right details on the website. They helped us to integrate this into the auction site.

00:26:05

One thing I will say at this point is, for corporations -- and this should be for anyone, in general -- make sure you're using a legitimate and compliant exchange. You want to make sure that the exchange you're using, which we used Coinbase at this point, ensuring that they are transparent with their users. We know that if the funds come into a Coinbase wallet, we will be able to transfer them out into USD at the end of the project. The more compliant and legitimate they are, the easier it is for you to be sure that this is going to be a successful project, [that] you're not going to lose money, and it helps you sell this project as well to your auditors and to your risk department. 

00:26:53

We had done our KYC on Coinbase, as much as they had done their KYC on us as a company. It was a mutually beneficial transition, and that's why it's really important, because cryptocurrency can be nefarious. It's well known for being used in fraudulent circles. Therefore, if you set up a project like this, make sure you know who you're dealing with. And they also helped us as well to get extra services, like helping us to set this up on the website and to put the wallet online. That was very helpful information that they provided to us so that our teams, as a whole, could make sure this project worked. 

Debra Richardson: Okay. And so this was a few years ago. You chose Coinbase. I am sure, even a few years ago, you had other options. But now there are probably lots of options out there, but your advice is to make sure that you do your due diligence on whatever platform, right, digital exchange that they plan to use.

00:28:04                     

Lee-Ann Perkins: Yeah, and it's always about counter-party risk. In any type of transaction you're doing with funds, make sure you know who you're dealing with. As you know, banks do their KYC on us all the time, but it's also up to us to make sure we know who we are working with. And the more options there are out there, the more difficult it becomes for corporates to sift through who's real, who shouldn't we be working with.

What was great about Coinbase at the time was they were the only publicly traded exchange that we could find, that we felt comfortable with, and that really helped because we had information on them. They were transparent with their information, and that just made it easier for us to choose them as our partner. 

00:28:51                     

Debra Richardson: That's a great tip to have: Look for those that are public companies. Did I say that right?

Lee-Ann Perkins: That's correct.

Debra Richardson: Yeah, so that you would be able to do more due diligence on that company because they are publicly traded. Great.

All right, and then -- so now you've got the -- you've got it integrated with your website so that you can do the sales there. And then what was the next step? 

Lee-Ann Perkins: This was where I think the most time was spent with the teams, was actually training everyone who was involved, all the stakeholders, particularly on the finance side and the internal audit: How are we going to manage these types of crypto transactions when this project goes live? It was very new to all of us. On the AR side and the accounting side, revenue recognition, how do we manage this? How do we understand what we should be doing, so that we know that it's compliant?

00:29:57

And this was also, again, where we worked with the contact, who I initially found to walk me through cryptocurrency and how it works. We understanding the accounting treatment that needed to happen for this. And it was very much about training everyone internally that this is what we've been mandated to do. It wasn't a project I came up with that I'm causing extra work for everyone else. We have to work as a team and make sure, start to finish, we all know what we're doing. 

And then also making sure that, because this is so new to us, we understand the progress and we understand any of the risks that are inherent with dealing with cryptocurrency, or any type of new type of transaction. We had to be very honest with each other. If we didn't understand something or know what to do, we had to, as a team, talk it through, get the resources we need to ensure that we were doing it correctly, and then get it vetted by auditing. 

00:30:57

It was very much a rinse-and-repeat situation with training, but very important for all of us to ensure we were compliant. 

Debra Richardson: All right, so train the team, and that included all of the stakeholder teams and then monitor, okay. So what was the next step?

Lee-Ann Perkins: This was when we actually launched the project. It was such an exciting time because we did this in an international location, and all of us in the U.S. stayed up super late so that we could see when the auction opened, and how much the bids were, the starting bid and how it was growing, until the end of the auction. It was a very short auction. I think it was eight hours or something.

00:31:51

It was very exciting when it got to a large amount, and the winning bid was announced. It was just one of those exciting moments in time where you see this project you've put into place, when you didn't know what you were doing to the end of it, where I'm no expert, but I feel like the project was very successful. We had to figure out something new, put it into practice, launch the campaign -- 

[Interruption for message: "This audio was created with Podcastle.ai."]

Lee-Ann Perkins: -- you put it into practice, launch the campaign, get the winning bid, and then complete the transaction on the wallet side. Once it concluded, we then had to finalize everything on the finance side, to close the loop, to ensure the funds were transferred from the wallet to the bank account. It was reconciled. We all knew what the amount was, what we were looking for.

00:32:55

And then because, as I had said at the beginning, this was not the core business of the company to deal with cryptocurrency, so we had decided from the beginning, once the funds were -- the auction was closed and the funds were redeemed, we want to get this back into USD so we could recognize the revenue as such, and not be concerned about the volatility of the crypto. That's what we did. 

For a short time afterwards, we had to ensure we were daily reconciling the account to make sure there was no leftover value in the crypto, there was no changes to the balance, and then for a year we looked at the balances on a daily basis and monthly basis, ensured accounting and auditing teams had those statements. And then we ended up closing the crypto account because we didn't feel that this was something that we would be doing going forward, but the project in itself was very successful and a great learning tool for all of us. 

00:33:53                     

Debra Richardson: Yes, because if the company decided in the future to offer or to accept crypto payments on the AR side, or maybe even on the AP side to pay using cryptocurrency, then the base is already there.

So just to kind of summarize that step by step, it looks like there were eight steps: You defined the use case, the stakeholders. You brought in the applicable teams. You identified the wallet type that you were going to use, and then you did your vendor vetting and KYC compliance. [You] came up with Coinbase, a publicly traded company that makes the vetting and the KYC a little easier. Once you had that, you set up your internal controls. Then you funded the wallet after you did some test transactions. And then you integrated that purchase option of digital or of cryptocurrency into your sales and website. You trained the teams, all of the internal stakeholders, and then the last step was launching it. 

00:35:20

And then once the transaction was completed, after some time, you closed the wallet, so you kind of wrapped it all up. So the eight steps there, okay. 

Lee-Ann Perkins: [Crosstalk]  -- said about, in the future, if you wanted to do it, you'd have the base. They still had the account and the understanding of how to do it, but just would not have in the immediate future done more transactions. So that's a good call-out.

Debra Richardson: Yeah, and these eight steps you said took about four weeks, right?

Lee-Ann Perkins: Yeah, and the longest part of that was the research, and then also the KYC. We were told that the KYC was a lot easier than any bank account, and, to be honest, it was not. It was just as challenging and time-consuming as a regular bank account, so don't be fooled by that. It's always tough to KYC an account.

00:36:17                     

Debra Richardson: Got it, okay. All right, so let's get in a couple of more details or questions about some of the details of that process. I know you had mentioned Bitcoin. Was that the digital coin that you used?

Lee-Ann Perkins: We did. And to be honest, it was really because it was the most understood and widely recognized coin at the time when we did this project. It was what Coinbase also suggested to us to use, as well as the auction house we were using. It had relatively high customer use and customer trust at the time, and therefore just seemed like it would align with our target audience and would be the right coin of choice.

00:37:03

The other coin at the time was Ethereum, but it didn't have as much transactional knowledge at the time as Bitcoin, so that's why we ended up with Bitcoin. 

Debra Richardson: I know that you did this project as like a trigger for marketing because they wanted to do an auction, and they wanted to have the purchasing option of cryptocurrency.

But let's say you're in AR and you do have customers that have their own cryptocurrency wallets and want to pay you using cryptocurrency. Let's say, if all your customers wanted to pay you using cryptocurrency, could you have used the same process? Would there have been any challenges with that? 

00:38:00                     

Lee-Ann Perkins: No, I think it's as you said. If your customers are going to pay you that way, it's a strategy shift for the company. It would be a company initiative if that was what the company was doing. So I would say, yes, you could use the same strategy. What I would caution, though, is to not be as quick to the draw as we were on this one-time project.

I would say, start with really seeking to understand why you are offering this coin, and ensure that all the stakeholders are aware of the risks that are inherent with crypto, and to quantify them as they become known. So that's really important.

00:38:44

And then, realistically, you would have to ensure that the company understood there's volatility with crypto, so the accounting team would really have to understand how they're going to account for that volatility, and how they report the fluctuations in the gains and losses. 

And if you have that very well understood and you have a good process to follow and your auditors sign off, then I would say, yes, for certain industries and companies it makes sense. Because if that's what the customer wants to do, you do need to provide that. It's just being very thoughtful and understanding what it means and what the risks are. And then it's like any other project: As long you know those, you can quantify those, and you can manage them, then I would say, yes, the same steps to using the wallet and implementing. 

Debra Richardson: Yeah, and you make a great point because I know you did this as a part of an auction that was, again, triggered by your marketing department, and that's probably a small amount when compared to accepting higher levels of payments from your customers.

00:40:03

And so, yeah, I would assume that probably would have a little more forethought on a long-term basis to deal with things like fraud and, like you said, the volatility of the crypto itself. 

Lee-Ann Perkins: And I agree with you because I also think you need experts and companies who are really familiar with crypto and the transactions and the downstream impacts. It's not easy to just say -- like we mentioned at the beginning, to just say to your AR, AP and treasury teams, "Now we accept crypto." There's a lot more to it. Lay the foundation, understand what it means, and have the experts in-house, or as a consultant, to make sure you're doing this correctly from the beginning, so you can build on it and scale as you grow.

00:40:55                     

Debra Richardson: All right, so you received -- the auction went on, right? Everybody was up late and kind of watching. It was exciting. And then the winner of the auction made that payment using cryptocurrency. So you now have that amount in your cryptocurrency wallet. What was the process of transferring that to your company's bank account?

Lee-Ann Perkins: Yeah. And this was actually the easier part to the project, because we had set this up. We'd done a test transaction of transferring money into the wallet and then transferring it back out again, so we knew who would be able to implement -- sorry, who would be able to put the transaction into the Coinbase system and who would be the approver. So we had an initiator and an approver. Those two people already knew their tasks and the fact that they would have to do this right at the beginning of the opening day, once the transaction had ended, the auction had ended.

00:42:08

They knew that that was their next step in the process. And to avoid the price volatility, we wanted to just accept it for the sale and then move the money out, back into the bank account. I think this was easily done on Coinbase's system. It was a very simple transaction of knowing what to do and how to approve the transaction and how to watch the funds flow and confirm it on the other end. And most of it was handled by Coinbase when we set it up. They understood the complexity of it and helped us work through it, so I would say this was one of the easier parts of the actual project, was moving the funds out. 

00:42:49

But it's because we set up the controls ahead of time and we knew who was involved. We knew who the signers were. And we knew, once the auction ends, let's move out the funds and do the next step and complete [it]. 

Debra Richardson: Okay. And so I think that's one very important --

[Interruption for message: "This audio was created with Podcastle.ai."]

Debra Richardson: Okay. And so I think that's one very important -- because with any payment method, you always have to think about what internal controls do you put in place to avoid both internal fraud and external fraud. And so what were some of the extra security or [what] steps did you have to put into place to accommodate the cryptocurrency payments, to avoid fraud?

00:43:48                     

Lee-Ann Perkins: Yeah. And when we did the KYC to set up with wallet, we also had to KYC the initiator and the approver of the transaction. So don't forget that step when you're setting up this wallet. It's not only just on the company, but it's on the persons who are going to ensure the transaction is initiated and approved.

And then, because we had done that ahead of time, we already had two people with their KYC complete, making sure, as we would for any other movement of funds, that there's always two people. There's always separation of duties. There's dual authentication and very strong password policies (each person only knew their own password), and ensuring all of that is in place to actually move the funds. 

00:44:35

So we treated this just as any other transaction, no different or no lax controls just because it was a different type of payment method. In fact, I think we were even more cautious because we didn't truly understand or hadn't done this before. I think it's really important to make sure you use those standing protocols to ensure you don't have, like you said, the internal or external fraud. Because it was a large amount of money, so we had to make sure were covered in that area, too. 

00:45:06                     

Debra Richardson: Right. I know you talked about before, like on the process side, you added daily reconciliation, you brought in the audit department, audit reviews, and you did payment confirmations, fraud screenings.

Lee-Ann Perkins: Yes. And I think this is where we also were a little bit more cautious and more just aware of fraud and how things could go wrong, because it was a new type of transaction. We did daily reconciliations. We made sure the auditors had copies of all of the transactions, all the bank statements, more so than we would a normal bank account, and also doubled down on the training, making sure anyone who was involved in this process was well trained and was aware of what we were doing, and had full visibility into the transactions.

00:46:02

It was only a few of us who actually had access to the Coinbase system, where you could see the transactions, which was also another way of ensuring only a few eyes on the actual system. But then the outputs of the statements were widely distributed so everyone was aware. 

Debra Richardson: So let me ask: What was the payment confirmation that you did?

Lee-Ann Perkins: That was as we would normally do, as you would see in a banking system, with a [unintelligible] confirmation with the reference number. There were those type of references on the statements as well for the transaction.

Debra Richardson: All right. And getting into the fraud side of it, this is actually where this topic came up for me because I -- every year, the FBI puts out a report of all of the complaints and the losses that have come through there in that control center -- IC3 I think is what they call it.

00:47:08

But they put this report out, usually February or March of every year for the previous year, and it just kind of summarizes all of that data. I will tell you, I missed last year, where they, for 2023, reported for the first time fraud in cryptocurrency, but I saw it when they did -- they issued the 2024 report earlier this year. 

And so what I saw is, of course, "business email compromise," right, because that's what you typically see on the AP side, and that is a huge fraud risk because we always have fraudsters sending emails or coming through other ways to try to get the vendor's remittance information updated to a fraudulent -- to fraudulent bank details. Even today, a fraudulent remittance address, because they want checks, too. 

00:48:16

That was the first time I looked that I saw that there's business email compromise in cryptocurrency payments as well. In 2023, it was $63 million, and in 2024 it was losses of $9.3 billion, so it really did increase. That's where this whole cryptocurrency as a digital payment -- because it's yet another payment method that the fraudsters are getting into now. 

And so I'll ask: Did you have any fraud or fraud attempts that occurred? I don't think so, but did you see any fraud attempts maybe?

00:49:09                     

Lee-Ann Perkins: We did not have any fraud attempts on the -- let me say this again. We did not have any fraud on the account, but what we did see was an increase in phishing/spoof emails pretending to be the wallet provider, Coinbase, and spoof payment confirmations from false customers. I mentioned that I had also opened up my own personal account to test, and I was getting a lot more junk emails and spoof emails from Coinbase. In fact, I still get them today. So we did see that. There was an increase in fraudulent spoofing emails coming our way because of this new digital type.

00:49:49

But we, fortunately, did not have any successful fraud on the account or during this project. 

Debra Richardson: Okay, that's really good. And you know what? I need to restate that because the $9.3 billion that I talked about for 2024, that was all types of cryptocurrency losses. But if you just look at business email compromise, in 2023, it was $4.8 million. And then in 2024, that's where the $63 million comes in. That's still a huge increase, and it just shows that fraudsters evolve. It is very important to do as you did, right, to make sure you're putting out that extra security, internal control steps in place, to avoid not only internal fraud but also external fraud because the fraudsters are after those wallets.

00:50:53                     

Lee-Ann Perkins: Yeah, they are. And you know, Debra, it's frightening the numbers that you're quoting, and I'm sure some of that is also even lower than it realistically is because people don't always report everything.

Debra Richardson: Right.

Lee-Ann Perkins: It reminds me that, in the day and age that we're living in, trust is earned through verification, not assumption. We used to think, we know who we're talking to, or we can call someone and we recognize them, so it's fine. But it's really through intense verification, using technology. That's the only way we're going to help this not grow. I don't know if we can take it away, but we can help it not grow.

Debra Richardson: Right. So you know what? This was incredibly helpful. I am sure that someone that -- because I know it's not something that pervasive in accounts receivable or accounts payable today, but I know that it's probably going to grow, so I think this is going to be very helpful, at least for those practitioners that want to get started and just have a high level of what you did and how that worked out.

00:52:04

I appreciate you coming on today, Lee-Ann. 

Lee-Ann Perkins: Thank you for having me, Debra. I hope that it is information that's useful to others, and we can all learn and share alike.

Debra Richardson: All right, thank you.

Lee-Ann Perkins: Thanks, Debra.

Debra Richardson: So, again, I thought that interview was great. And what I liked about it is what we talked about in the beginning. She was voluntold to get it done, and, yes, she did get it done.

Grace Chlosta: Oh, my gosh. It's so incredible, a really inspiring story, and she completed so many things in a month. It's crazy the amount that she was able to get done.

Debra Richardson: Yes. I love that. And just like all of us in financial operations, we're all type A personalities, and she broke that down into eight easy -- not easy steps, but easily understandable steps of what you needed to do. Love that.

Grace Chlosta: Absolutely. Just a really great story, and I feel like this is just something you're going to hear even more about, and something different that we haven't really talked about so far at IOFM. So a really great topic. Thank you so much, Debra, for leading that conversation and for bringing it to all of our attentions.

00:53:18                     

Debra Richardson: No problem. [I] would love to dive deeper into it as more people start to, or more companies start to have cryptocurrency payments as one of their digital payment options.

Grace Chlosta: Yeah, absolutely. Well, thank you again, Debra. We look forward to having you on the podcast again soon. We'll talk to you then.

Debra Richardson: All right, thanks, Grace.

Grace Chlosta: Thank you so much for listening to the IOFM podcast. Remember to head on over to the Member Forum to discuss today's episode and provide ideas for our next one. And to stay up to date on IOFM's current events, both in-person and virtually, head on over to IOFM.com.

Continuing Education Credits available:

Receive 1 CEU per hour of listening time towards IOFM programs:

Receive 1 CEU per hour of listening time towards maintaining any AP and P2P related program through IOFM! These programs are designed to establish standards for the profession and recognize accounts payable and procure-to-pay professionals who, by possessing related work experience and passing a comprehensive exam, have met stringent requirements for mastering the financial operations body of knowledge.

Continuing Education Credits available:

Receive 1 CEU per hour of listening time towards IOFM programs:

Receive 1 CEU per hour of listening time towards maintaining any AP and P2P related program through IOFM! These programs are designed to establish standards for the profession and recognize accounts payable and procure-to-pay professionals who, by possessing related work experience and passing a comprehensive exam, have met stringent requirements for mastering the financial operations body of knowledge.