Leading US banks are vying for custody of spot Bitcoin ETFs in a joint Valentine's Day letter to the SEC
US banking giants write a joint letter to the US Securities and Exchange Commission (SEC) advocating for custody of spot Bitcoin (BTC) exchange traded funds (ETF).
The letter, sent on Valentine's Day by four industry leaders, is addressed to SEC Chairman Gary Gensler and asks him to review a law passed in 2022 (SAB No. 121) that regulates crypto custody in light of several important developments, such as the approval to change spot market BTC ETFs.
According to Thomson Reuters, SAB No. 121 forces companies that protect digital assets to report them on their balance sheets at fair value.
However, the Bank Policy Institute American, the Bankers Association, the Financial Services Forum and the Securities Industry and Financial Markets Association all say SAB No. 121 limits their ability to participate.
“Since the publication of SAB 121 in 2022, associations have expressed their concerns about the bulletin to the Commission both in writing and in meetings with Commission staff.
The largest concern identified and discussed is how SAB 121's balance sheet requirement will negatively impact U.S. banking organizations and investors due to the associated regulatory implications.
The associations have emphasized that the balance sheet treatment will prevent highly regulated banking organizations from offering a digital asset custody solution on a large scale.
Additionally, the associations have emphasized that the balance sheet requirement coupled with the overly broad definition of “crypto asset” in SAB 121 will have a chilling effect on the ability of banking organizations to develop responsible use cases for distributed ledger technology (DLT). to develop) in a broader sense.”
As a solution, the groups suggest narrowing the definition of “crypto asset” and exempting banking organizations from the requirement to list the assets on paper but maintaining disclosure requirements.
“Exempting banking organizations from accounting treatment but requiring them to make certain disclosures about their digital activities would mitigate the concerns raised by banking organizations without undermining SAB 121’s goal of promoting disclosure to investors.”
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