Re: Update on Efforts to Implement 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
Office of the 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") appreciated the opportunity to speak with the Securities and Exchange Commission's ("SEC") Office of the Chief Accountant ("OCA") and Division of Corporation Finance (collectively, the "Staff") on June 3, 2022 regarding SAB 121 and our request to defer its effective date. As discussed, our member firms are working diligently across various functions to bring to the Staff well-developed fact patterns for analysis – whether individually, through the SIFMA and ABA Accounting Committees or through the Association of International Certified Professional Accountants Digital Asset Working Group ("DAWG") – but this very time consuming process is on-going.
In advance of providing these specific fact patterns, we have (1) identified various factors specific to banking organizations that we believe sufficiently mitigate the risks outlined in SAB 121, to facilitate immediate discussions with the Staff on how our member firms should evaluate the scope of the guidance given their specific facts and circumstances (Attachment A); (2) summarized certain of the specific fact patterns we expect to provide, for the Staff’s reference, to articulate the range of matters on which we believe clarity would be helpful, particularly as it relates to the definition of "crypto-assets" (Attachment B); and (3) outlined a series of questions regarding the recognition, measurement and disclosure of the safeguarding liability (which are not fact pattern specific), to help clarify the appropriate application of the guidance in SAB 121 (Attachment C). To the extent the Staff has any questions on these attachments, please do not hesitate to contact Kevin Zambrowicz or Michael Gillette. We thank you again for your willingness to continue the dialogue on these and other issues.
Regards,
Kevin A. Zambrowicz
Managing Director & Associate General Counsel
SIFMA
Michael L. Gullette
Senior Vice President, Tax and Accounting
ABA
