SEC Commissioner Hester Peirce Slams Agency’s Approach With SAB 121

US Securities and Exchange Commission (SEC) Commissioner Hester Peirce has voiced ongoing reservations regarding the SEC’s Staff Accounting Bulletin No. 121 (SAB 121).

Her remarks followed a speech on September 9 by SEC Chief Accountant Paul Munter, who reiterated that there has been no change in the Commission’s perspective on SAB 121.

Hester Peirce was referring to Munter when he highlighted that the SEC staff continues to support the guidelines of SAB 121 amidst increasing scrutiny. He detailed that the regulation mandates entities to acknowledge liability on their balance sheets to represent their obligation to secure digital assets held on behalf of others.

Munter clarified that this method ensures that investors receive pertinent and timely data to evaluate the risks associated with the custody of cryptocurrencies for others.

He also pointed out certain exceptions; for instance, bank-holding companies that provide crypto custodial services with bankruptcy protections might not have to recognize such liabilities. Similarly, broker-dealers that manage crypto transactions without controlling the cryptographic keys could also be exempt from this requirement.