For SAB 121, which has been a subject of discussion for a long time and was even planned to be abolished with the votes held in the Senate and the House of Representatives, but was revived at the last moment with the Biden veto, “exemption assistance” came from the SEC.
As it is known, SAB 121, whose open name is “Staff Accounting Bulletin No. 121”, was enacted by the SEC in March 2022. This bulletin, which is a set of rules, had caused objections from companies wishing to provide cryptocurrency custody services.
The main reasons for the objections …
One of the biggest objections of companies about this bulletin was the accounting of stored cryptocurrencies at market value. The fact that cryptocurrencies are volatile assets was imposing very heavy burdens on companies in this sense, including cost and tax. Possible irregularities and confusion in financial reports also caused fear.
Biden continues to protect Gensler
As it is known, the objections did not reach the Congress and the bill to invalidate this bulletin was passed by both the Senate and the House of Representatives. However, US President Joe Biden vetoed this bill, which came to his desk, despite the approval of both parties. Yesterday, the House of Representatives did not object to Biden’s veto and the veto was approved.
According to the news of The Block from the US media, some companies may not be subject to the supervision of SAB 121 with the technologies and applications they have developed. According to a source speaking within the SEC, if these companies can prove themselves with their practices, they may also be exempt from SAB 121.
“Some companies have shown themselves”
The source within the SEC used the following statements while explaining the difference between the past and the present:
“In April 2022, there were a bunch of unanswered questions about how the law on these things would shake out, and we saw a lot of crypto industry participants that were not careful about providing these services harm a lot of customers,”
Especially in FTX, which went bankrupt at the end of 2022, the use of customer funds in many transactions without the knowledge of these people and the exchange’s loss of a large amount of money in leveraged transactions made a great noise in the USA. The process resulted in SBF receiving a 25-year prison sentence.
The institutions that objected the most to SAB 121 were banks that thought to prevent customer loss by starting to provide cryptocurrency custody services.