Fact Sheet: Key Considerations That Should Guide Any Action Targeting SEC Staff Accounting Bulletin 121 Regarding Risky Crypto Assets

WASHINGTON, DC – Stephen Hall, legal director and securities specialist, issued the following statement on the release of Better Markets' new fact sheet on SEC Staff Accounting Bulletin (SAB) 121 and a congressional resolution seeking to repeal it:

“SAB 121 provides that companies that hold crypto assets for customers face particular risks and should therefore report these assets as liabilities on their balance sheets. According to the bulletin, banks would be among the companies expected to have capital to hedge against the liabilities arising from crypto assets. This important guidance to protect investors and markets is now the subject of a Congressional Review Act resolution that would nullify the bulletin.

“When considering the CRA, a number of important considerations should be at the forefront. Accounting standards are critical to the proper functioning of U.S. capital markets. The world envies these markets because they are well regulated, which is why so many people around the world have the trust and confidence to invest their money in these markets. History shows, including the Enron scandal and many others, that weak accounting can lead to financial disaster and undermine trust.

“It is therefore critical to consider whether Congress has the expertise to challenge the SEC's judgment in the Bulletin on some highly technical accounting issues.” And wouldn't the CRA resolution set a dangerous precedent for eliminating accounting standards that designed to protect investors, customers, markets and financial stability – especially given the exceptional and proven risks posed by crypto markets? Congress must carefully consider whether to roll back an important measure that will help protect investors and the entire financial system from the potentially catastrophic consequences of another crypto market collapse. In our fact sheet, we highlight these and other considerations that should inform any actions targeting this important bulletin.”

You can find the fact sheet here.

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Better Markets is a nonprofit, nonpartisan, independent organization founded in the wake of the 2008 financial crisis to promote public interest in financial markets, support Wall Street financial reform, and make our financial system work for all Americans again . Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and grows Americans' jobs, savings, pensions and more. To learn more, visit www.bettermarkets.org.