Congress Members Criticize SEC Bulletin On Crypto Accounting Treatment

In late July, four members of Congress sent a letter to the U.S. Securities and Exchange Commission (SEC) requesting it retract a bulletin that advises on the accounting treatment of crypto assets. The SEC bulletin advises that public companies, as well as private companies combining with special purpose acquisition companies, report crypto assets as liabilities and provide additional disclosures regarding the value of those assets. This represents a departure from the practice of holding custodied assets in separate accounts outside the balance sheet. The congressmen warned that the change would make the custody of such assets by banks "economically infeasible" and claimed that the SEC failed to follow "proper process," such as providing a public comment period.