SAB 122 Just Changed Everything for Crypto—But There’s a Catch
For the past two years, crypto accounting firms, banks, and exchanges have struggled with SAB 121, the SEC rule that forced financial institutions to classify customer crypto as a liability. It made custody a regulatory nightmare. But now, SAB 122 has overturned this rule—bringing a massive shift to crypto regulation.
While banks and stablecoin issuers are celebrating, there’s a hidden downside that few are talking about. As a crypto CPA or financial professional, understanding these changes is critical. In this deep dive, we break down the risks, the opportunities, and why the industry must act fast.
The Power of Proof of Reserves: Exchanges, Stablecoins, & ETFs
Proof of Reserves (PoR) is a transformative tool in the crypto ecosystem, ensuring transparency and trust across exchanges, stablecoins, ETFs, and tokenized assets. Originating after the 2014 Mt. Gox collapse, PoR addresses a fundamental question: Do platforms truly hold the assets they claim?
This concept involves two key components:
Proof of Assets: Demonstrating on-chain ownership of funds.
Proof of Liabilities: Ensuring customer liabilities match or exceed held assets.
With use cases ranging from verifying exchange reserves to backing stablecoins and tokenized real-world assets, PoR has become a cornerstone of crypto accountability. Its future promises innovations like on-chain automation, regulatory adoption, and cross-industry applications, making it critical for crypto companies to adopt PoR as a competitive advantage.