‍Photo Credit: Valerie Plesch/Bloomberg‍

The Chief Accountant of the US Securities and Exchange Commission, Paul Munter, has claimed staff views communicated in the Staff Accounting Bulletin No. 121 (SAB 121) crypto custody rules remain “unchanged.”

Addressing the banking conference on Monday, Munter reiterated that crypto custody service providers “that align with the fact pattern described in SAB 121” should present a liability on its balance sheet to “reflect its obligation to safeguard the crypto-assets.”

Explaining the reason behind his statements, Munter claimed:

“I believe that such financial reporting provides relevant, timely information that investors need to assess the unique risks and uncertainties related to safeguarding crypto-assets for others.”

The SAB 121 was introduced by the SEC in March 2022 to provide guidance for companies on how to account for and disclose information regarding the crypto assets held for their users.

Munter’s statement and the SAB 121 faced criticism from the crypto community and politicians. 

On May 8, the House of Representatives voted to pass a bill overturning SEC’s crypto custody rules, believing it was unfair for banks looking to safeguard crypto assets.  

Although the bill was passed with 228 votes to 182, US President Joe Biden vetoed the resolution, putting the SEC’s SAB 121 into play. Biden claimed: “This Republican-led resolution would inappropriately constrain the SEC’s ability to set forth appropriate guardrails and address future issues.” 

The recent statements about SAB 121 by Munter has sparked debate over whether the SEC is protecting the investors or creating an “unfair” market. 

ETF Store president Nate Geraci claimed that SEC “simply don’t want to provide *regulated* financial institutions” with the ability to custody crypto. SEC’s Commissioner Hester Price showed her criticism for the crypto custody rule, claiming: “I continue to be concerned about the SAB 121 substance & process, but welcome your thoughts.”
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