While the US House continues to hold the Biden veto on the SAB 121 accounting rule, the U.S. Securities and Exchange Commission (SEC) is now offering some relaxation on crypto reporting for banks and brokerages.
SEC Allows Banks to Exclude Crypto Holdings from Balance Sheets
The U.S. securities regulator has now opened up a new pathway for banks and brokerages to avoid reporting their customers’ crypto holdings on their balance sheets. However, the banks need to make sure that they mitigate all associated risks. This is a welcome move in response to the controversial crypto-accounting guidance turning into a matter of strong debate in Congress.
The SEC staff has already started offering guidance on certain arrangements that don’t make it mandatory to report a liability of crypto holdings on the balance sheets, said an SEC source familiar with the matter.
Several top banking players have been in consultation with the US SEC over the last year. They have also received the approval to bypass the balance sheet reporting while making sure about the protection of customers’ assets in the case of bankruptcy.
The SEC has demanded additional measures from the bank, including internal safeguards to enhance the protection of these holdings, the source told Bloomberg.
Also Read: US CPI Data: Gold and Crypto Markets Expect Upswing
Other Crypto Firms Likely to Benefit From the Rules
The SEC’s stand on crypto accounting could be applicable to several other crypto companies in the US offering similar services to crypto holders. Lenders have been arguing that the strict accounting rules prevented them from offering crypto services since bigger balance sheets would trigger capital requirements from the banks, not the SEC.
Bank and financial industry trade groups have been advocating for Congress to rescind the staff guidance, which functions as an agency rule. On Thursday, the House failed to override a presidential veto of a measure that sought to revoke Staff Accounting Bulletin 121, thereby leaving the accounting rule as it is.
The source also added that banks have successfully argued in closed-door consultations with the SEC staff that wallets and spot Bitcoin ETFs should be outside the scope of crypto guidance.
Also Read: Bitcoin And XRP In Focus Ahead Of Big US Crypto-Political Events
The post US SEC Eases Crypto Reporting For Banks And Brokerages appeared first on CoinGape.
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