Share this article
US Fed Evaluating SEC’s Position on Digital Assets Custody, Powell Says
The SEC’s directive that customers’ digital assets may need to be treated as belonging to an exchange’s balance sheet has banking regulators scratching their heads about how it’ll work.
Updated May 11, 2023, 5:11 p.m. Published Jun 22, 2022, 5:10 p.m.
U.S. Federal Reserve Chairman Jerome Powell said on Wednesday that a recent, much-debated move by the Securities and Exchange Commission (SEC) has thrown a potential wrench into common practice for how the U.S. central bank and banking regulators view digital assets held by lenders. Powell's remarks came in testimony on monetary policy before the Senate Banking Committee.
In an accounting directive – the innocuous-sounding Staff Accounting Bulletin No. 121 – to public companies, the SEC had advised firms holding customers’ digital assets that they’d need to consider those assets as belonging to the companies’ own balance sheets. This move spurred Coinbase (COIN) to declare in a public filing that customers’ assets may be caught up with the company’s in a hypothetical bankruptcy. That admission caused some fear among customers, though the company argued it wasn’t a signal about the company’s health.
STORY CONTINUES BELOW
"Custody assets are off balance sheet, have always been,” Powell told the Senate Banking Committee. “The SEC made a different decision as it relates to digital assets for reasons it explained, and now we have to consider those.”
As it relates to the banks the Fed oversees in the U.S., Powell said the SEC’s interpretation is “certainly something we're focusing on very closely right now,” adding that his agency is working with other banking regulators to figure out how it might change the way they assess lenders that keep cryptocurrencies.
After the filing from Coinbase, the Biden administration began pushing behind the scenes to insist that future legislation require legal walls to protect customers’ digital assets. And another incident – the drama at Celsius Network, the crypto lending platform that halted customer withdrawals last week – threw a spotlight on the problem of shielding customers’ money.
Republican lawmakers in the U.S. have argued that the securities regulator overstepped with its staff bulletin, which they say amounts to new, back-door regulation.
More For You
What to know:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
More For You
Five Crypto Firms Win Initial Approvals as Trust Banks, Including Ripple, Circle, BitGo
The firms have obtained conditional approval from the Office of the Comptroller of the Currency to convert into national trust banks.
What to know:
- Crypto firms Circle, Ripple, Fidelity Digital Assets, BitGo and Paxos received conditional approval by the OCC to become federally chartered trust banks.
- The move sets up firms to follow in the footsteps of Anchorage Digital, the first to get a federal bank trust charter in the U.S.
- A slew of stablecoin issuers and crypto firms, including Coinbase, filed for federal oversight after GENIUS Act was written into law.
Top Stories
