Senator Warren supports the SEC's controversial accounting standard for crypto assets, SAB 121

ChainCatcher News: U.S. Senator Elizabeth Warren recently expressed support for the SEC Staff Accounting Bulletin (SAB) 121 during a Senate hearing. Warren stated that the standard applies to companies dealing with cryptocurrency businesses and aims to provide accounting guidance. She believes that SAB 121 "simply clarifies" how companies should consider risks related to cryptocurrency and display these risks in their disclosures. The relevant risks include hacking, theft, and the loss of cryptocurrency when a protective company goes bankrupt.

Warren added that the standard does not require crypto platforms to add customers' cryptocurrencies to their balance sheets—this statement contradicts that of House Financial Services Committee Chairman Patrick McHenry, who previously stated that the bill "requires financial institutions and companies that safeguard customer digital assets to keep those assets on their balance sheets." Furthermore, this standard does not make platforms the owners of their customers' cryptocurrencies. (CryptoSlate)

Yesterday, it was reported that the U.S. Senate voted 60 to 38 to overturn a resolution regarding SEC SAB 121; however, the resolution may be vetoed when it reaches President Biden's desk. It is reported that the SEC's previously issued Staff Accounting Bulletin 121 requires companies to record the cryptocurrencies they hold on their balance sheets, but critics argue that this regulation is too stringent and effectively hinders major custodians and companies from holding cryptocurrencies for their clients.