New accounting guidance from the US Securities and Exchange Commission (SEC) has potentially hamstrung banks’ crypto projects, Finextra has claimed.
According to the publication, the update is in conflict with guidance released earlier this year, which stated that US-listed firms that hold cryptocurrencies on behalf of users should account for those assets as a liability on their balance sheet and inform users of the risks.
Reuters also claimed that the new accounting guidance would make it ‘too capital-intensive for lenders to hold crypto tokens on behalf of clients’.
This guidance applies to all public companies, but banks face a particularly challenging situation due to capital rules that require them to hold cash against balance sheet liabilities.
A number of banks who were building their crypto offerings have had their operations disrupted or suspended at the current time.
SEC chair Gary Gensler said, “Given that most crypto tokens are securities, it follows that many crypto intermediaries — whether they call themselves centralised or decentralised (e.g., DeFi) — are transacting in securities and have to register with the SEC in some capacity.
“Traditional financial intermediaries have expressed an interest in providing services to investors in the crypto market and to do so in compliance with time-tested investor protection rules. Existing crypto security intermediaries need to do so in compliance with investor protection rules as well. All intermediaries in our capital markets deserve to compete — and comply — on a fair playing field.”
Sender, a NEAR-based eco-wallet, has raised $4.5m in a private round led by Pantera Capital.
Sender is a non-custodial wallet tailored for NEAR, including an extension wallet and mobile wallet. It provides a one-stop wallet solution for users to send, receive, and store NEAR-based assets easily and securely.
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