SEC Staff Proposes Exemption for Firms Complying with Crypto Asset Safekeeping

IconCryptoNewsTerminal Staff11 Jul, 2024

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SEC Staff Proposes Exemption for Firms Complying with Crypto Asset Safekeeping

The Securities and Exchange Commission (SEC) is considering providing a safe harbor that would exempt specific companies and financial institutions from its controversial crypto asset accounting guidance, known as SAB 121. This proposal aims to address concerns raised by companies and industry experts regarding the guidance's potential impact on their operations and ability to demonstrate compliance. According to individuals familiar with the matter, the safe harbor exemption would be available to companies that implement specific procedures and technology to ensure the safekeeping of crypto assets. This includes providing evidence that the assets are returned in the event of a crypto bankruptcy. The proposal is not intended to exempt crypto companies themselves from SAB 121, and the guidance remains in effect. However, this safe harbor would provide relief to certain firms that can demonstrate robust and reliable measures for securing crypto assets. It is worth noting that a previous resolution to overturn SAB 121 was passed by both the House and Senate but vetoed by President Joe Biden. ---

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