Re: Request for Deferral of Effective Date of Staff Accounting Bulletin No. 121 “Accounting for Obligations to Safeguard Crypto-Assets an Entity Holds for its Platform Users” (“SAB 121”)
Paul Munter
Acting Chief Accountant
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549
Dear Mr. Munter:
The Securities Industry and Financial Markets Association (“SIFMA”) and the American Bankers Association (“ABA”) appreciate the focus of the Securities and Exchange Commission’s (“SEC”) Office of the Chief Accountant and Division of Corporation Finance (collectively, the “Staff”) on the various accounting considerations regarding crypto-assets. Given the unique characteristics of many crypto-assets, we believe that in certain cases the existing accounting guidance being applied to crypto-assets does not necessarily provide decision-useful information to users of the financial statements. Accordingly, in our responses to the Financial Accounting Standards Board’s (“FASB” or the “Board”) agenda consultation last year, we asked the Board to add a project to its technical agenda to address the classification and measurement of digital assets, and were pleased that earlier this month the Board voted to do so.
SAB 121 was issued on March 31, 2022 and requires, in many cases, an SEC registrant to record an obligation to safeguard crypto-assets it holds for platform users. The obligation is measured at the fair value of the related crypto-assets, with a corresponding asset also recognized. As you are aware, this guidance has raised a number of policy, scope, and legal questions given its potential broad long-term impact on our member firms, which we are reviewing and addressing with the SEC, as well as other regulators and policy stakeholders. Notwithstanding these broader concerns, this letter is focused on the effective date of SAB 121. Specifically, through discussions with the Staff as well as crypto-asset accounting experts at multiple accounting firms, our member firms believe there are a number of questions regarding the scope and application of SAB 121 and, therefore, believe deferral of the effective date is necessary to ensure these matters are appropriately addressed.
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