In a statement made in February, Kenneth E. Bentson Jr., the president and CEO of the Securities Industry and Financial Markets Association, expressed his concern regarding the deviation from the current accounting treatment for traditional assets held in custody. He pointed out that these assets are not required to be recorded on a firm’s balance sheet. Bentson further highlighted the negative impact of SAB 121 on bank capital and liquidity ratios, stating that it has discouraged banks from offering custodial services for digital assets.
