SIFMA and ABA Urge SEC to Delay Effective Date for Crypto SAB
SIFMA and the American Bankers Association ("ABA") urged the SEC to delay the effective date of Staff Accounting Bulletin No. 121 ("SAB"), which would require firms providing custody for crypto-assets to bring those assets onto their balances sheets.
In the joint letter, the trade associations raised concerns that member organizations will not have enough time to evaluate and analyze existing safeguarding arrangements and develop appropriate processes and internal controls designed to achieve compliance with the accounting bulletin.
The associations noted that other banking agencies such as the Federal Reserve Board, the FDIC and the OCC are "jointly evaluating a number of crypto-asset activities in which banking institutions may be interested, and plan to provide greater clarity on such activities within the context of their respective frameworks." Given that ongoing evaluation, SIFMA and ABA requested that the SEC delay the effective date of SAB No. 121 until the later of January 1, 2023 or the finalization of the efforts of the banking agencies.
Alternatively, if the SEC deems that a deferral of the effective date is not appropriate, the associations requested a phased implementation, where the rule would initially only apply to situations where the registrant is directly safeguarding crypto-assets.
In addition, the associations highlighted that while the majority of their members have very limited involvement in directly safeguarding cryptocurrencies, some are indirectly involved or are involved in other cryptocurrency-asset-related activities. The associations stated that firms that do not directly safeguard crypto-assets, including those that:
safeguard cryptocurrencies through a third-party custodian;
"tokenize" non-digital financial products via blockchain and provide custodial services for those assets; or
act as a fiduciary of an account that holds crypto-assets,
may be subject to the wide ranging impact of SAB No. 121.
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