SAB 121 Archives - Top Crypto Game https://topcryptogame.com/tag/sab-121/ The latest crypto news! Tue, 10 Sep 2024 11:27:33 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.2 https://topcryptogame.com/wp-content/uploads/2022/01/cropped-favicon-32x32.png SAB 121 Archives - Top Crypto Game https://topcryptogame.com/tag/sab-121/ 32 32 SEC’s Hester Peirce questions Commission’s stubborn stance on SAB 121 https://topcryptogame.com/secs-hester-peirce-questions-commissions-stubborn-stance-on-sab-121/ https://topcryptogame.com/secs-hester-peirce-questions-commissions-stubborn-stance-on-sab-121/#respond Tue, 10 Sep 2024 11:27:33 +0000 https://topcryptogame.com/secs-hester-peirce-questions-commissions-stubborn-stance-on-sab-121/ US Securities and Exchange Commission (SEC) Commissioner Hester Peirce has raised ongoing concerns about the SEC’s Staff Accounting Bulletin No. 121 (SAB 121). Peirce’s comments came after a Sept. 9 speech by SEC Chief Accountant Paul Munter, who affirmed that the Commission’s stance on SAB 121 remains unchanged. SEC’s unchanged position Munter emphasized that the […]

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US Securities and Exchange Commission (SEC) Commissioner Hester Peirce has raised ongoing concerns about the SEC’s Staff Accounting Bulletin No. 121 (SAB 121).

Peirce’s comments came after a Sept. 9 speech by SEC Chief Accountant Paul Munter, who affirmed that the Commission’s stance on SAB 121 remains unchanged.

SEC’s unchanged position

Munter emphasized that the SEC staff’s view on the controversial SAB 121 has not shifted, despite the growing attention around the regulation. He explained that the staff believes an entity must record a liability on its balance sheet to reflect its responsibility to safeguard digital assets held for others.

Munter stated this approach provides investors with timely and relevant information to assess the risks of safeguarding crypto on behalf of others.

He noted that some exceptions apply. For example, bank-holding companies that safeguard crypto with bankruptcy protection may not need to record liabilities. Additionally, broker-dealers facilitating crypto transactions but lacking control over cryptographic keys may be exempt.

Munter’s views align with the SEC’s position, which asserts that SAB 121 aims to enhance transparency and improve risk management in the fast-evolving crypto industry.

Despite these intentions, SAB 121 has sparked concerns within the industry as many view the regulation as an overreach by the SEC. US lawmakers voted to overturn the SEC’s guidance earlier this year, but President Joe Biden vetoed the repeal.

Peirce’s opposition

In response to Munter’s speech, Peirce took to social media platform X to reiterate her concerns about both the content and process of SAB 121. She urged others to share their thoughts on the policy with her via email.

Nate Geraci, president of the ETF Store, commented that the SEC seems resistant to allowing regulated financial institutions to custody digital assets.

He stated:

[The SEC] simply don’t want to provide regulated financial institutions [with the] ability to custody crypto. Apparently, [the Commission] prefer [the] company they allowed to IPO & then sued to custody vast majority of spot btc ETF assets.”

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]]> https://topcryptogame.com/secs-hester-peirce-questions-commissions-stubborn-stance-on-sab-121/feed/ 0 SEC reportedly accepts SAB 121 exceptions to crypto accounting rules for banks and brokerages https://topcryptogame.com/sec-reportedly-accepts-sab-121-exceptions-to-crypto-accounting-rules-for-banks-and-brokerages/ https://topcryptogame.com/sec-reportedly-accepts-sab-121-exceptions-to-crypto-accounting-rules-for-banks-and-brokerages/#respond Fri, 12 Jul 2024 10:17:19 +0000 https://topcryptogame.com/sec-reportedly-accepts-sab-121-exceptions-to-crypto-accounting-rules-for-banks-and-brokerages/ The US Securities and Exchange Commission (SEC) has reportedly accepted a proposal with exceptions for certain institutions affected by the controversial Staff Accounting Bulletin No. 121 (SAB 121), according to Bloomberg Tax. The SEC has allowed some banks and brokerages to bypass balance sheet reporting through new business practices that provide exceptions to the crypto […]

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The US Securities and Exchange Commission (SEC) has reportedly accepted a proposal with exceptions for certain institutions affected by the controversial Staff Accounting Bulletin No. 121 (SAB 121), according to Bloomberg Tax.

The SEC has allowed some banks and brokerages to bypass balance sheet reporting through new business practices that provide exceptions to the crypto accounting compliance guidance.

Under this arrangement, the financial institutions will not report customers’ crypto holdings as a liability on their balance sheets per SAB 121 stipulations. However, they must protect their customers’ assets in cases of bankruptcy or failure.

Additionally, the institutions would be required to implement internal safeguards to address legal risks related to the emerging industry.

Market observers noted that this move will expand US crypto holders’ custody options and attract more traditional financial institutions into the crypto industry.

SAB 121

This development comes more than two years after the SEC introduced the controversial SAB 121 guidance, which was intended to bring greater transparency and improved risk management to the rapidly evolving crypto industry.

The regulation enforces the recognition of custodial obligations as liabilities on balance sheets and demands detailed disclosures about the nature and risks associated with them.

However, the implementation of SAB 121 has raised significant concerns. Many industry stakeholders see the regulation as an overreach by the SEC. They argue that it imposes undue burdens on companies and could stifle innovation.

Critics also note that the regulation does not adequately distinguish between crypto on public ledgers and traditional assets on permissioned ledgers, complicating compliance efforts.

As a result, US lawmakers recently tried to overturn the advisory. However, their efforts were thwarted when President Joe Biden vetoed the resolution. A subsequent attempt to counter the President’s veto also failed, as lawmakers could not meet the required threshold.

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