SEC May Offer Some Relief on Crypto Accounting Policy SAB 121

According to Cointelegraph, the U.S. Securities and Exchange Commission (SEC) may be backing down on its proposed accounting policy SAB 121 for cryptocurrencies.

Galaxy Research head of research suggests that SEC Chief Accountant Paul Munter has proposed some exemptions that allow bank holding companies and introducing brokers to avoid some of the custody requirements in SAB 121.

Banks can avoid SAB 121 reporting requirements if they receive written permission from state regulators for "bankruptcy isolation" of customer assets, clearly define standards in their contracts, and regularly conduct risk assessments.

Introducing brokers can also be exempt from SAB 121 if they meet three conditions:

• They cannot hold customer private keys.
• They cannot act as a third party or agent for the introducing broker in transactions.
• They must obtain a legal opinion confirming they are a qualified introducing broker for digital assets.