{"id":59506,"date":"2022-04-01T16:21:30","date_gmt":"2022-04-01T13:21:30","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=59506"},"modified":"2025-09-04T22:11:45","modified_gmt":"2025-09-04T19:11:45","slug":"sec-tells-crypto-exchanges-to-reflect-clients-cryptocurrency-holdings-on-balance-sheets","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/sec-tells-crypto-exchanges-to-reflect-clients-cryptocurrency-holdings-on-balance-sheets\/","title":{"rendered":"SEC tells crypto exchanges to reflect clients&#8217; cryptocurrency holdings on balance sheets"},"content":{"rendered":"<p>Exchanges listing cryptocurrencies will be required to reflect on their balance sheets the digital assets they hold for clients. This follows updated SEC accounting guidance, <a href=\\\"https:\/\/www.wsj.com\/amp\/articles\/sec-tells-exchanges-to-treat-customer-crypto-holdings-as-liabilities-11648743902\\\">Wall Street Journal<\/a> reports.<\/p>\n<p>\\n\\n<\/p>\n<p>The document reflects SEC Chair Gary Gensler&#8217;s warning that crypto holdings on trading platforms effectively amount to \u201cunsecured loans\u201d to investors.<\/p>\n<p>\\n\\n<\/p>\n<p>Custodied client cryptocurrencies will need to be accounted for as assets on the exchange, while the liabilities to them \u2014 in the liabilities section.<\/p>\n<p>\\n\\n<\/p>\n<p>Currently, as traditional brokers do, platforms disclose the total value of digital assets belonging to their clients in the accompanying financial statements.<\/p>\n<p>\\n\\n<\/p>\n<p>The publication notes that Coinbase, in its 2021 annual report, showed assets worth $21.3 billion on its balance sheet, while client cryptocurrencies at that date were valued at $278 billion.<\/p>\n<p>\\n\\n<\/p>\n<p>The SEC&#8217;s recommendations for crypto platforms contrast with the approach taken by traditional brokers. The latter disclose customer funds on off-balance-sheet accounts. This stems from a legal precedent that established that, in the event of bankruptcy, assets belong to customers.<\/p>\n<p>\\n\\n<\/p>\n<p>According to SEC officials, the law does not take cryptocurrencies into account.<\/p>\n<p>\\n\\n<\/p>\n<blockquote class=\\\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\\\">\n<p>\u201cLiabilities in these agreements are tied to unique risks that do not exist in asset-protection agreements unrelated to cryptocurrencies. These risks may have a material impact on the company&#8217;s operations and financial condition,\u201d the document explains.<\/p>\n<\/blockquote>\n<p>\\n\\n<\/p>\n<p>Earlier in 2021, the US <a href=\"https:\/\/u1f987.com\/en\/news\/wsj-lack-of-crypto-accounting-standards-creates-investor-risks\">urged<\/a> the Financial Accounting Standards Board to develop reporting requirements for companies with crypto asset holdings.<\/p>\n<p>\\n\\n<\/p>\n<p>Earlier, Gensler urged Congress <a href=\"https:\/\/u1f987.com\/en\/news\/gary-gensler-urges-u-s-congress-to-clarify-regulation-of-bitcoin-exchanges\">to bring clarity to the regulation of Bitcoin exchanges<\/a>. Later he said that the latter <a href=\"https:\/\/u1f987.com\/en\/news\/sec-chief-urges-broader-investor-protection-rules-for-bitcoin-exchanges\">should comply with investor protection requirements<\/a>, similar to those applied in stock and derivatives markets.<\/p>\n<p>\\n\\n<\/p>\n<p>In January 2022, the SEC <a href=\"https:\/\/u1f987.com\/en\/news\/sec-pledges-tougher-oversight-of-bitcoin-exchanges\">promised<\/a> to tighten oversight of Bitcoin exchanges.<\/p>\n<p>\\n\\n<\/p>\n<p>Follow ForkLog news on Telegram: <a href=\\\"https:\/\/t.me\/forklogfeed\\\" target=\\\"_blank\\\" rel=\\\"nofollow noopener\\\">ForkLog Feed<\/a> \u2014 the full news feed, <a href=\\\"https:\/\/telegram.me\/forklog\\\" target=\\\"_blank\\\" rel=\\\"nofollow noopener\\\">ForkLog<\/a> \u2014 the most important news, infographics and opinions<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Exchanges listing cryptocurrencies will be required to reflect on their balance sheets the digital assets they hold for clients. This follows updated SEC accounting guidance, The Wall Street Journal reports.<\/p>\n","protected":false},"author":1,"featured_media":59507,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[36,128,1211],"class_list":["post-59506","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-regulation","tag-sec","tag-stock-market"],"aioseo_notices":[],"amp_enabled":true,"views":"16","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/59506","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=59506"}],"version-history":[{"count":1,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/59506\/revisions"}],"predecessor-version":[{"id":59508,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/59506\/revisions\/59508"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/59507"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=59506"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=59506"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=59506"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}