New SEC guidance on accounting and disclosures rankles Commissioner Peirce -Breaking
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U.S. companies that safeguard their clients’ crypto-assets received new accounting guidance Thursday in the form of a Securities and Exchange Commission, or SEC, Staff Accounting Bulletin. Hester Peirce from the Securities and Exchange Commission, who is a staunch advocate for crypto-assets, strongly reacted to the guidance.
Staff Accounting Bulletin (121) NotedThe high technical, legal, and regulatory risk associated with custody of cryptocurrency-assets is higher than traditional assets. Those risks impact the operations and financial condition of companies such as Coinbase (NASDAQ:), PayPal (NASDAQ:) and Robinhood (NASDAQ:), which safeguard users’ crypto-assets and allow the users to trade them on their platforms. For this reason, companies are advised to list their users’ assets on their books as liabilities as well as assets at their fair value at initial recognition.
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