The Securities and Exchange Commission should withdraw a staff accounting bulletin that changed how banks and other publicly traded entities account for obligations to safeguard digital assets, SEC Commissioner Mark Uyeda said.
The SEC published Staff Accounting Bulletin 121 in 2022, without first consulting other regulators or taking public comment on its changes to digital asset custody. During a fireside chat today at an American Institute of Certified Public Accountants’ conference, Uyeda said the lack of a proper notice and comment process for SAB 121 was his biggest concern.
“It just gets issued and there is no commission vote on it, either,” he said. “It is a statement of the staff. And I think one of the things that needs to occur, given the huge impacts [that SAB 121’s] had, is that it needs to be with withdrawn.”
Uyeda instead suggested “a more thoughtful process” should be used to address the question of digital assets held in custody, perhaps led by the Financial Accounting Standards Board.
Earlier this year, President Biden vetoed a House joint resolution supported by lawmakers of both parties that would have overturned SAB 121. The American Bankers Association and other financial industry groups had urged Biden to let the resolution stand, saying the bulletin, which effectively requires banks to record the value of the digital assets held in custody on the balance sheet, threatened the banking sector’s ability to provide its customers with safe and sound custody of digital assets.
