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Pursuant to the SAB-121 requirements by the SEC, Credit Suisse has disclosed the amount of “digital assets” in custody but didn’t give the break up of the particular crypto assets.
Swiss banking giant Credit Suisse has been holding more than $30 million in “digital assets” for its clients by the end of Q2 2022. As per the regulatory filings, the Swiss banking giant reportedly held CHF31 million (roughly $32 million) in assets and liabilities. Interestingly, the bank didn’t report holdings of those assets in the prior two quarters. In the filing, Credit Suisse cryptically reported “digital asset safeguarding assets” in its custody. however, it hasn’t provided any breakdown of what the “digital assets” were.
Credit Suisse Crypto Custody
Unlike market-leading cryptocurrencies such as Bitcoin and Ether, these digital assets are similar to tokenized ski resorts. Credit Suisse has also disclosed that they have been holding tokenized securities for their clients as per the accounting guidance provided by the US Securities and Exchange Commission (SEC).
As per the SAB-121, firms holding crypto assets for their clients have to report them as either assets or liabilities on their balance sheet. In their effort to highlight the risks of crypto custody, regulators unveiled this guidance in March 2022. During its second quarter financial results, Credit Suisse said that it follows the accounting guidance.
However, the SEC guidance calls for “clear disclosure of the nature of” its crypto assets. But the Swiss bank only revealed the amount and didn’t say what digital assets, which leaves room for confusion.
Some of the top Wall Street banks like Goldman Sachs, BNY Mellon, Citigroup, and State Street have followed the SAB 121 guideline in their recent quarterly financial reports. None of them reported holding any crypto assets by the end of the second quarter.
In complaince with the SEC rule, some crypto companies like Coinbase have also started reporting crypto risks. Coinbase reported that its customers could lose all their assets in case it went bankrupt.
Crypto Regulations Getting Tougher
Following the crypto market crash this year and several crypto lenders declaring bankruptcy, regulatory agencies have been approaching crypto markets more seriously. SEC and other regulators have been closely following the developments and called for tougher rules for crypto regulations.
Crypto regulations though will bring greater clarity to the sector and top crypto players have welcomed this move.