رونوشت 🔗
WEBVTT
00:00:00.335 --> 00:03:33.835
Hello listeners, welcome to this episode of Cryptonomics. Before we jump into today's discussion, please keep in mind this recording is for general education and is not intended to constitute investment advice. Any opinions expressed are those of the participants and do not necessarily represent those of with them . SAB 1 21 is officially rescinded. Hello everyone and welcome back to this episode of cryptonomics, brought to you by Ham . I'm your host, mark Eckley , and today we are celebrating that SAB 1 21 is no longer a thorn in our side. On January 23rd, 2025, the SEC issued staff Accounting Bulletin 1 22 officially rescinding SAB 1 21. SAB 1 21 was issued by the SEC on March 31st, 2022, just under three years ago. The original purpose per the SEC was to provide guidance on the accounting for obligations to safeguard crypto assets that NT holds for its platform users, effectively forcing banks and financial institutions to create a capital requirement by carrying cash or reserve assets, one-to-one with client crypto held in custody. So some of the key points from SAB 1 21, 1 is safeguarding obligations and measurement entities that hold crypto assets for their users would've been required to recognize a liability to reflect their obligation to safeguard these assets and measure both the liability and the corresponding asset at fair value. Two is asset recognition. Entities should also recognize an asset representing their right to receive compensation for safeguarding these crypto assets. And then three, the disclosure requirements. Entities must provide detailed disclosures about the nature and risks of the crypto assets they hold for users, specifically including how they manage these risks. The practice of SAB 1 21 per the SEC staff is that it was intended to guard against the significant risks and uncertainties associated with safeguarding crypto assets. All in with all of these requirements and guidance, the SEC tried to put forward with SAB 1 21 made it economically unreasonable, unrealistic, and just not possible for major financial institutions, effectively stopping the banks from offering crypto custody services for Bitcoin and other digital assets. With this repeal, banks and institutions custody and crypto for customers are no longer required to allocate reserves to balance out Bitcoin as a liability on the balance sheet. This SAB 1 21 is basically faced backlash since day one and has been fought against for the past two and a half years with majority of the crypto industry against it. SAB 1 21 was the subject of Congressional Review Act resolution passed by both the House and Senate, though that resolution was vetoed by former President Joe Biden in the summer of 2024. So it continued to linger on until the SEC officially rescinded it. The enactment of SAP 1 22 officially rescinding, rescinding the interpretive guidance and instead it directs firms to use FS B or Financial Accounting Standards Board Rules or ISA International Accounting Standard Provisions. With all that today is finally here. SAB 1 21 is no longer. Thank you for tuning into Cryptonomics and I'll talk to you next time. All views expressed in this podcast by Mark Eckley or his guests are solely their opinions and do not reflect the opinion of rhythm . This podcast is for informational purposes only.