United States-Around the 1960s: Office paper trays, in-tray overflows, and out-tray with small piles. .. .. [+]
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Cryptocurrency still has many accounting and financial reporting issues that need to be addressed, but it goes without saying. But similarly, regulating or attempting to clarify regulatory measures through market edicts is not sustainable and may not achieve the intended effect. In particular, Axie Infinity hacks – as hacks and breaches continue to dominate the headlines surrounding the crypto asset sector. Over $ 600 million in total – It’s just the latest event.
Cryptographic assets continue to permeate the status of investment and financial services, including investment by national and financial institutions, so the need for better accounting standards cannot be overlooked. Accounting rules and standards may not be the most attractive or exciting aspects of crypto conversations, but they are very important. Markets and asset classes that have achieved trillions of dollars in valuation cannot simply proceed without proper and sufficient valuation, accounting, and reporting standards.
Regulations in both the United States and other jurisdictions have so far been patchwork of comments, issuance, and opinions, often ambiguous and sometimes inconsistent. To make matters worse, the enforcement mechanisms surrounding these various regulations can be explained as inconsistent at best. So while it looks like positive progress, regulation, and even regulatory attempts, it’s not the right approach by breaking news or editing.
Let’s take a look at what’s included in the recent Staff Accounting Bulletin (SAB) and why these effects aren’t as obvious as they first appear.
Breaking news is not enforceable. The first thing market participants, investors, or business owners should remember is that this breaking news, or breaking news about it, is not a enforceable law. No matter how much specific breaking news is discussed in the mainstream media, it does not change the fact that these breaking news are not binding laws. Just as the Internal Revenue Service (IRS) issues Frequently Asked Questions (FAQs) and publicly comment on cryptographic issues, the formal IRS legal requirements have been enacted by changes in tax law. ..
That said, it’s not enforceable on its own, but this security bulletin provides insight into current thinking about how cryptography should be treated in the future.
Technical ambiguity. Breaking news itself is not legally enforceable, but it is interesting to note how specific and focused this short document contains. Looking at this security bulletin, two key components stand out. First, there is a recommendation that organizations that provide custody services through crypto assets traded by their owners must be included in their financial statements. This expression takes the form of setting a liability on the balance sheet related to the risk of providing custody services and offsetting this liability with assets.
It is true that management companies, including those that provide the above services in crypto space, have already tried this, but the fact that the ratings have become very prominent can provide further clarification on this issue. There is sex. This security bulletin also recommends that organizations disclose and report risks and costs specifically related to crypto assets, including legal, regulatory, technical, and financial risks.
These particular accounting recommendations, coupled with the rather broad (some say ambiguous) risk categories, make this security bulletin an interesting combination of implementation specificity and ambiguity.
Narrow applicability.. Whenever the SEC or other regulatory body issues any declaration or potential guidance regarding crypto assets, there is always a heading and discussion that follows. Nevertheless, despite being fully aware of the fact that these regulators are exercising formal and informal power by influencing the behavior of the organization, this report The scope of application is relatively narrow. Because the SEC has only jurisdiction and enforcement power, relatively few companies listed in the United States are affected by this security bulletin.
It is interesting to point out that the timing of this newsletter is about as interesting as the content of the newsletter itself. Although the number of organizations directly monitored by the SEC and subject to future regulations is small, the crypto asset sector is growing very rapidly. Alongside the growth of centralized exchanges and platforms, decentralized finance (DeFi) spaces are in the midst of a rapid growth phase. However, with this growth, the recent surge in hacking has resulted in billions of investor losses.
This breaking news is not under the direct supervision of the SEC, but may be a warning to the DeFi sector that the Commission is monitoring the development of the sector.
Cryptographic regulation and policymaking are neither simple nor simple attempts. You need to consult with multiple stakeholders to produce comprehensive and logical results. That said, as the sector continues to evolve rapidly, virtually every rule-making body publishes statements, opinion pieces, and other non-binding guidance, further complicating navigation in this space. There is likely to be. It’s complicated, but it’s not impossible. All new declarations, whether binding or not, actually make the space clearer for users, investors, and policy makers. As always, active individuals and businesses that are willing to keep up with the changes in the universe will be rewarded for their efforts.
