The SECGov's guidance to account crypto assets held by banks on behalf of customers as liabilities could be 'prohibitively costly' for lenders, according to a report. By iamsandali
all U.S.-listed public companies that function as crypto custodians should account for their crypto exposure as liabilities instead of assets on their balance sheets and disclose risks associated with those liabilities to investors. The custody of crypto assets by lenders presents unique technological, legal and regulatory risks compared with other assets, the SEC guidance said.
Accounting for crypto held on behalf of their clients as liabilities is particularly harsh on banks because they are required to hold cash to match liabilities on their balance sheets, according to the report published on Friday. An unnamed European bank looking to offer crypto custody services in the U.S. was quoted in the report as saying it would be"prohibitively costly" to do so under the new guidance.
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