hold or not - SEC Crypto Accounting Guidelines Relaxed for Some Companies

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LIVE UPDATES • $45 Million Coindeal Fraud Case Spurred to Trial by Judge • SEC Crypto Accounting Guidelines Relaxed for Some Companies • New OKX European Hub Will Be Malta To Strictly Comply With MiCA Framework • Judge Denies Coinbase Subpoena Request for Gensler’s Communications, Lawsuit Continues • Pendle Domain Hijacking Be Warned, User Funds Are Safe • A DNS Attack On Squarespace Puts Crypto Domains At Risk, Says CoinGecko COO • BlockDAG’s Dev Release 70 Highlights X1 Miner’s Upgrades as App Goes Live on Apple Store; Presale Value Surges by 1300% • BNB Chain Hack Loses $1.6B, Immunefi Investigation Unveils! • US Lawmakers Demand Release Binance Executives by Nigerian Government! • Tether USDT Redemptions Will Be Stopped on Multiple Blockchains in 2025

News SEC Crypto Accounting Guidelines Relaxed for Some Companies 2 hours ago - Around 2 mins mins to read

Key Points:

The SEC has granted exemptions from strict cryptocurrency accounting rules (SAB 121) to certain companies and financial institutions following industry requests.

Despite no changes to SEC crypto accounting guidelines, companies demonstrated new technologies allowing cryptocurrency retrieval in bankruptcies.

Several companies and financial institutions have sought relief from controversial crypto accounting guidelines issued under SEC Staff Accounting Bulletin (SAB) 121, according to Bloomberg Tax.

Read more: House Wants to Overturn Biden’s SAB 121 Veto of Crypto Custody Standards

SEC Crypto Accounting Rules Exempted for Certain Companies

The SEC staff has agreed to certain business requests, allowing these entities flexibility in their accounting practices related to cryptocurrencies.

SAB 121, introduced in March 2022, has been a focal point for companies amid concerns following several high-profile bankruptcies in the cryptocurrency industry. Companies have approached the SEC seeking clarity and flexibility in developing policies and procedures specific to handling cryptocurrencies.

Despite no revisions to SAB 121 itself, companies have demonstrated new technologies and procedures that ensure cryptocurrency can be retrieved by customers in bankruptcy scenarios, akin to traditional assets like US dollars. The demonstration has led the SEC to exempt some entities from strict compliance with SAB 121.

The SEC crypto accounting guidelines could potentially broaden the range of companies available for American crypto holders to store their assets. However, banking industry representatives argue that adherence to SAB 121 imposes stringent capital requirements, limiting their ability to offer cryptocurrency services.

Congress Fails to Overturn SEC Guidance on Cryptocurrency

Efforts to overturn SAB 121 have faced political challenges. The US House of Representatives recently failed to override President Biden’s veto of a resolution aimed at rescinding the SEC crypto accounting guidance. Despite majority support in the House, the vote fell short of the required two-thirds majority.

The debate underscores ongoing tensions between regulatory oversight and industry innovation in the burgeoning cryptocurrency sector. Companies like Coinbase and Robinhood have already begun reporting their customers’ crypto holdings on their balance sheets since 2022, adapting to evolving regulatory landscapes.

crypto SAB 121 SEC SEC Crypto Accounting

Author Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.

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SEC Crypto Accounting Guidelines Relaxed for Some Companies