Original Mayer Brown content, perspectives and insights from across our global platform that touch on digital assets, decentralized finance, cryptocurrencies and related fields.
The SEC Says, “Show Us Your Crypto”: US SEC Issues SAB 121—Accounting for Custody of Crypto-Assets
On March 31, 2022, the US Securities and Exchange Commission (SEC) published Staff Accounting Bulletin No. 121 (Bulletin) regarding the accounting of, and associated disclosures relating to, an entity’s obligation to safeguard crypto-assets that it holds for platform users. The Bulletin expresses the views of the staff in the Division of Corporation Finance and the Office of the Chief Accountant. This Legal Update focuses on who is affected, what the affected entities need to do and when the guidance applies; summarizes Commissioner Hester M. Peirce’s response to the Bulletin; and discusses some practical considerations for affected entities.
Key Considerations When Joining a Blockchain Consortium
Most blockchain technologies are developed by foundations or consortia, the members of which are often representatives of the industry hoping to create and successfully deploy the technology. The range of industries that have discovered the benefits of joining a blockchain consortium is diverse, including financial services, insurance, supply chain and logistics, transportation, healthcare and pharmaceuticals. Regardless of the industry, though, a number of common, key challenges must be addressed when creating or when joining a blockchain consortium. These include the governance of the consortium; the ownership, licensing and use of technology produced by it; and any associated antitrust claims and issues that may arise if it is to successfully launch and ensure the widespread adoption of blockchain technology within its industry.
SEC Division of Examinations 2022 Exam Priorities
On March 30, 2022, the Division of Examinations of the US Securities and Exchange Commission (the “Division” and “SEC,” respectively) announced its examination priorities for 2022. Among other significant areas, this year’s priorities includes a specific focus on emerging technologies and crypto-assets. Examinations will focus on firms that are offering new products and services or employing new practices such as fractional shares, “Finfluencers,” or digital engagement practices. For market participants engaged with crypto-assets, the Division will review the custody arrangements, offer, sale, recommendation, advice, and trading of crypto-assets.