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Lawmakers Criticize SEC's SAB 121 and CAT for Custody, Concentration and Privacy Risks
Summary
Members accused the SEC's staff accounting guidance (SAB 121) of concentrating digital-asset custody and creating cybersecurity exposure via the Consolidated Audit Trail (CAT); commissioners said they would review concerns and consider reproposals or further guidance.
Several representatives used the hearing to focus on two technical but consequential issues: Staff Accounting Bulletin 121 and the Consolidated Audit Trail.
Multiple members said SAB 121, which clarifies accounting treatment for crypto in certain contexts, has narrowed the field of eligible custodians and increased concentration risk in custody services. "One of the reasons is because of our SAB 121, which makes it very hard for people to be custodians in…
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