Hester Peirce the SEC (Scandalous Ethereum Connections) scattershot & inefficient approach to crypto

[HAL1000]

https://www.sec.gov/news/statement/peirce-response-sab-121-033122

I write regarding Staff Accounting Bulletin Number 121 (“SAB 121”), which is yet another manifestation of the Securities and Exchange Commission’s scattershot and inefficient approach to crypto.

SAB 121 reflects the staff’s evolving view on accounting for obligations to safeguard crypto-assets an entity holds for its platform users. The staff has determined that, because of risks particular to crypto-assets, affected companies should record a liability and corresponding asset on their balance sheets at fair value. In support of this position, the staff highlights technological, legal, and regulatory risks associated with safeguarding crypto-assets, and “an increased risk of financial loss.”[1] My concern is not with the accounting determination itself, which may be appropriate, but with the way the change is being made.

First, why now? The staff cites an October 2020 Report of the Attorney General, which in turn cites a public report that estimates the amount of crypto-assets stolen from cryptocurrency platforms in 2018.[2] In other words, these risks are not new. Moreover, the staff has reviewed financial statements of entities that have obligations to safeguard crypto-assets held for their platform users since at least Fall 2020.

Second, the SAB does not acknowledge the Commission’s own role in creating the legal and regulatory risks that justify this accounting treatment. The Commission has refused, despite many pleas over many years, to provide regulatory guidance about how our rules apply to crypto-assets, so some of the responsibility for the lack of legal and regulatory clarity lies at our doorstep. Some recognition of the Commission’s own role in creating the conditions to which the staff points as justification for the SAB would be appropriate.

Third, a staff accounting bulletin may not be the appropriate vehicle through which to make this accounting change and communicate it to the public. SAB 121 is unusual among SABs in that it provides definitive interpretive guidance for a very specific, very limited number of public companies. SAB 121 is also unusual among SABs in the detailed description of disclosure the staff expects to see, including a full paragraph describing relevant disclosures that “may also be required outside the financial statements under existing Commission rules.”[3] While past SABs have included statements suggesting companies should consider the applicability of other disclosure requirements outside of the financial statements, SAB 121’s granular guidance is unique.[4] The SAB, as a staff statement, is not enforceable,[5] but much of the language in the document reads as if it is. For example, SAB 121 tells affected companies they do not have to issue a restatement and gives them a transition period so that they do not have to apply the guidance immediately.

Finally, if we are trying to encourage companies to enter our public markets, we ought to embrace a more deliberate approach to changing rules—one that involves consulting with affected parties. Commission rulemaking with public notice and comment, Financial Accounting Standards Board (“FASB”) standard setting (especially given recent indications that FASB may address the accounting treatment of crypto)[6], or even engaging affected public companies through the Division of Corporation Finance’s filing review program in consultation with the Office of Chief Accountant would all be preferable methods to the SAB to address an issue such as this one.

HEY GG IF IT'S SO CLEAR THEN HOW COME EVEN YOUR OWN COMMISSIONERS DON'T AGREE WITH YOU, YOU CORRUPT PUPPET OF JAMIE DIMON.

Edited April 2, 2022 by HAL1000

[RobertHarpool]

14 hours ago, HAL1000 said:

The Commission has refused, despite many pleas over many years, to provide regulatory guidance about how our rules apply to crypto-assets, so some of the responsibility for the lack of legal and regulatory clarity lies at our doorstep

As a friend of the court, Deaton needs to file this with Judge Torres. 

[RipMcGillicuddy]

1 hour ago, RobertHarpool said:

As a friend of the court, Deaton needs to file this with Judge Torres. 

Wow, yes. Absolutely insane that after however many millions have gone into this Ripple case (among others), one of their own commissioners says this publicly. 

[HAL1000]

GG listen to yourself,

"FOR THE BIG MARKET CAP ONES, THERE NEEDS TO BE CLARITY IN THE MARKET"

JP MORGAN AND GOLDMAN SACHS MUST LOVE THEIR PUPPET SO MUCH. ALWAYS KEEP IN MIND THE REAL PEOPLE HE PROCLAIMS TO PROTECT (COUGH).

OF COURSE, IT'S NOT JUST THAT GUY.

BILL HINMAN'S BILLION DOLLAR ETH FREE PASS SPEECH, MADE SOME VERY RICH AND THE SEC LAWSUIT NOBBLED ETH'S BIGGEST COMPETITOR, MAKING THOSE WHO KNEW IN ADVANCE EVEN RICHER.