Crypto-Asset Accounting; SEC Rescinds Previous Guidance

The American Securities and Exchange Commission (SEC) has released Staff Accounting Bulletin No. 122 (SAB 122), providing updated guidance on accounting practices. This bulletin is particularly noteworthy as it rescinds previous interpretive guidance related to safeguarding crypto-assets.

Summary of SAB 122

The new staff accounting bulletin rescinds the interpretive guidance included in Section FF of Topic 5 in the Staff Accounting Bulletin Series.

This section was entitled “Accounting for Obligations to Safeguard Crypto-Assets an Entity Holds for its Platform Users” (Topic 5.FF). The rescission of this guidance marks a notable shift in the SEC’s approach to the accounting of crypto-assets.

Effective Date

The effective date for SAB 122 will be inserted upon its publication in the Federal Register.

BREAKING: 🇺🇸US SEC revoked SAB-121, big firms now can custody crypto without hassle🔥 pic.twitter.com/dncJrw3PYq

— Crypto India (@CryptooIndia) January 24, 2025

Contact Information

For further information, individuals can contact the Office of the Chief Accountant at (202) 551-5300, or the Division of Corporation Finance at (202) 551-3400. Both offices are located at the Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549.

Supplementary Information

The SEC clarifies that statements in staff accounting bulletins are not rules or interpretations of the Commission, nor should they be considered as bearing the Commission’s official approval.

Instead, they represent interpretations and practices followed by the Division of Corporation Finance and the Office of the Chief Accountant in administering the disclosure requirements of the Federal securities laws.

By rescinding previous guidance, the SEC is signaling a shift in how these assets should be accounted for, which could have wide-ranging implications for entities holding crypto-assets for their platform users.

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