The U.S. SEC allows certain companies to bypass controversial cryptocurrency accounting guidance SAB 121

PANews reported on July 12th, according to The Block, the U.S. Securities and Exchange Commission (SEC) allows certain companies to circumvent the controversial cryptocurrency accounting guidance SAB 121 under specific procedural and technical conditions. Since the release of SAB 121 in March 2022, some companies have consulted with SEC on how to formulate new cryptocurrency policies and procedures. SAB 121 requires companies that custody cryptocurrencies to record customer crypto holdings as liabilities, which has sparked widespread controversy in the industry. Recently, insiders at SEC stated that some companies have been granted exemptions by demonstrating their procedures and technology can allow customers to retrieve their cryptocurrencies in case of bankruptcy. These companies have shown control over assets just like traditional ones ensuring that accounting and protective measures for these assets meet requirements.

Although there has been no change in SAB 121, the SEC has extensively consulted with industry participants providing non-objectionable guidance. Some members of Congress tried to overturn SAB 121 but were unsuccessful. The SEC continues to cooperate with industries and regulatory agencies ensuring well-regulated institutions can provide cryptocurrency custodial services according to SAB 121.