SEC employees demand that crypto entitles are liable in the balance sheet
SEC employees demand that crypto entitles are liable in the balance sheet
- Companies such as crypto exchanges and custody banks should contain a clear disclosure of how many digital assets they have and what happens to them
- SEC commissioner Hester Pierce said the staff bulletin was a "scayershot and inefficient approach" for crypto
Members of the US Securities and Exchange Commission (SEC) wrote a bulletin on Thursday in which they show what they see as particularly problematic for the current accounting obligations within the crypto industry.
SEC employees said that they were of the opinion that companies should show a liability in their balance sheet in order to reflect their obligation to protect digital assets that are considered to be the platform users.
Personnel accounting Bulletin number 121 (SAB 121) expresses the views of the Stab and adds "exceptional" guidelines, the companies should be taken into account if they have obligations to protect digital assets.
Companies such as crypto exchanges and storage-which are commissioned to the administration of cryptographic keys to their users-are exposed to several risks if they save digital assets on behalf of their customers, SEC employees said.
The comment from SEC employees follows one of the largest hacks in the history in history when an Ethereum-which is used by the blockchain game Axie Infinity-was exploited in ether and USDC last week for $ 625 million. Exploiter used chopped private keys on March 23 to fake payouts.
"The obligations associated with these agreements contain unique risks and uncertainties that are not available in agreements on the protection of assets that are not crypto assets." These legal, technological and regulatory risks can have “significant effects” on the business and the financial situation of the company, they said
statements in the bulletins of personnel bookkeeping are not rules or interpretations of the SEC and only represent their own interpretations and practices of the employees of the Federal Working Act.
The Stab is of the opinion that the comments on annual financial statements should contain a "clear disclosure" of the type and amount of crypto, for which a company is responsible for storage.
The employees also guess the companies to create separate disclosures for every important crypto assets and to inform the SEC about all weak points that they could have due to "any concentration on such activities".
Sec-Commissioner Hester Pierce, lovingly called "Crypto Mom" in the Community, Thursday, in which he described the personnel of the staff as "scattered and inefficient approach for crypto".
"My concern does not apply to the accounting itself, which may be appropriate, but the way the change is made," said Pierce.
"An employee bookkeeping bulletin may not be the appropriate means of making this change in accounting and communicating to the public."
pierce also said that SAB 121 is "unusual"
"While earlier SAB's explanations contained that indicated that companies should consider the applicability of other disclosure obligations outside the annual financial statements, the detailed guidelines of SAB 121 are unique," said Pierce. "If we try to encourage companies to enter our public markets, we should pursue a more conscious approach to changing rules - one that includes the consultation of affected parties."
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The Post Sec Staff Call for Crypto Entitsies to Show Liability on Balance Sheet is not a financial advice.