Federal Register / Vol. 87, No. 69 / Monday, April 11, 2022 / Rules and Regulations 21015 

Country Entity License requirement License review policy Federal Register citation 

Huawei Technologies Co., Ltd. Xi’an 

Research Institute, National Development Bank Building (Zhicheng Building), No. 2, Gaoxin 1st Road, Xi’an 

High-tech Zone, Xi’an, China. 

Huawei Terminal (Shenzhen) Co., Ltd., 

Huawei Base, B1, Shenzhen, China. 

Nanchang Huawei Communication 

Technology, No. 188 Huoju Street, 

F10–11, Nanchang, China. 

Ningbo Huawei Computer & Net Co., 

Ltd., No. 48 Daliang Street, Ningbo, 

China. 

Shanghai Huawei Technologies Co., 

Ltd., R&D center, No. 2222, Golden 

Bridge Road, Pu Dong District, 

Shanghai, 286305 Shanghai, China, 

China. 

Shenzhen Huawei Anjiexin Electricity 

Co., Ltd., a.k.a., the following one 

alias: -Shenzhen Huawei Agisson 

Electric Co., Ltd. Building 2, Area B, 

Putian Huawei Base, Longgang District, Shenzhen, China; and Huawei 

Base, Building 2, District B, 

Shenzhen, China. 

Shenzhen Huawei New Technology 

Co., Ltd., Huawei Production Center, 

Gangtou Village, Buji Town, 

Longgang District, Shenzhen, China. 

Shenzhen Huawei Technology Service, 

Huawei Base, Building 2, District B, 

Shenzhen, China. 

Shenzhen Huawei Technologies Software, Huawei Base, Building 2, District B, Shenzhen, China. 

Zhejiang Huawei Communications 

Technology Co., Ltd., No. 360 

Jiangshu Road, Building 5, 

Hangzhou, Zhejiang, China. 

* * * * * * * 

1For this entity, see § 734.9(e) of the EAR for foreign-produced items that are subject to the EAR and § 744.11 of the EAR for related license 

requirements, license review policy, and applicable license exceptions. 2 Cybersecurity research and vulnerability disclosure. The following exports, reexports, and transfers (in-country) to Huawei Technologies Co., 

Ltd. (Huawei) and its non-U.S. affiliates on the Entity List for cybersecurity research and vulnerability disclosure subject to other provisions of the 

EAR are excluded from the Entity List license requirements: when the disclosure to Huawei and/or to its listed non-U.S. affiliates is limited to information regarding security vulnerabilities in items owned, possessed, or controlled by Huawei or any of its non-U.S. affiliates when related to 

the process of providing ongoing security research critical to maintaining the integrity and reliability of existing and currently ’fully operational network’ and equipment. A ’fully operational network’ refers to a ’third party’ network providing services to the ’third party’s’ customers. The term 

’third party’ refers to a party that is not Huawei, one of its listed non-U.S. affiliates, or the exporter, reexporter, or transferor, but rather an organization such as a telecommunications service provider. 

* * * * * 

Thea D. Rozman Kendler, 

Assistant Secretary for Export 

Administration. 

[FR Doc. 2022–07643 Filed 4–8–22; 8:45 am] 

BILLING CODE 3510–33–P 

SECURITIES AND EXCHANGE 

COMMISSION 

17 CFR Part 211 

[Release No. SAB 121] 

Staff Accounting Bulletin No. 121 

AGENCY: Securities and Exchange 

Commission. 

ACTION: Publication of staff accounting 

bulletin. 

SUMMARY: This staff accounting bulletin 

expresses the views of the staff 

regarding the accounting for obligations 

to safeguard crypto-assets an entity 

holds for platform users. 

DATES: Effective April 11, 2022. 

FOR FURTHER INFORMATION CONTACT: 

Karmen Ward, Professional Accounting 

Fellow, Office of the Chief Accountant 

at (202) 551–5300, or Todd E. 

Hardiman, Associate Chief Accountant, 

Division of Corporation Finance at (202) 

551–3400, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549. 


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21016 Federal Register / Vol. 87, No. 69 / Monday, April 11, 2022 / Rules and Regulations 

1This SAB expresses no view with respect to any 

other questions that these activities may raise for 

any of the entities involved, including the 

applicability of the registration or other provisions 

of the federal securities laws or any other federal, 

state, or foreign laws. 

2References throughout this SAB to ‘‘Entity A’’ 

are inclusive of the entity as well as any agent 

acting on its behalf in safeguarding the platform 

users’ crypto-assets. 

3For purposes of this SAB, the term ‘‘cryptoasset’’ refers to a digital asset that is issued and/or 

transferred using distributed ledger or blockchain 

technology using cryptographic techniques. 

4The service may be provided by Entity A or by 

an agent acting on Entity A’s behalf. 

5The guidance in this SAB is applicable 

regardless of whether the cryptographic key 

remains in the name of the platform user or is in 

the name of the Entity. 

SUPPLEMENTARY INFORMATION: The 

statements in staff accounting bulletins 

are not rules or interpretations of the 

Commission, nor are they published as 

bearing the Commission’s official 

approval. They represent staff 

interpretations and practices followed 

by the staff in the Division of 

Corporation Finance and the Office of 

the Chief Accountant in administering 

the disclosure requirements of the 

federal securities laws. 

Dated: March 31, 2022. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

Accordingly, Part 211 of Title 17 of 

the Code of Federal Regulations is 

amended as follows: 

PART 211—INTERPRETATIONS 

RELATING TO FINANCIAL REPORTING 

MATTERS 

■ 1. The authority citation for 17 CFR 

211 continues to read as follows: 

Authority: 15 U.S.C. 77g, 15 U.S.C. 77s(a), 

15 U.S.C. 77aa(25) and (26), 15 U.S.C. 78c(b), 

15 U.S.C. 78l(b), 15 U.S.C. 78m(b), 15 U.S.C. 

80a–8, 15 U.S.C. 80a–29(e), 15 U.S.C. 80a–30, 

and 15 U.S.C. 80a–37(a). 

■ 2. Amend the table in subpart B by 

adding an entry for Staff Accounting 

Bulletin No. 121 at the end of the table 

to read as follows: 

Subpart B—Staff Accounting Bulletins 

Subject Release No. Date Fed. Reg. vol. and page 

*******

Publication of Staff Accounting Bulletin No. 121 ......... SAB121 April 11, 2022 ...... [INSERT FEDERAL REGISTER CITATION]. 

Note: The text of Staff Accounting Bulletin 

No. 121 will not appear in the Code of 

Federal Regulations. 

Staff Accounting Bulletin No. 121 

The staff hereby adds Section FF to 

Topic 5 of the Staff Accounting Bulletin 

Series. This staff accounting bulletin 

(‘‘SAB’’) adds interpretive guidance for 

entities to consider when they have 

obligations to safeguard crypto-assets 

held for their platform users. This SAB 

is applicable to entities that file reports 

pursuant to Sections 13(a) or 15(d) of 

the Securities Exchange Act of 1934 

(‘‘Exchange Act’’) and entities that have 

submitted or filed a registration 

statement under the Securities Act of 

1933 (‘‘Securities Act’’) or the Exchange 

Act that is not yet effective. The SAB is 

also applicable to entities submitting or 

filing an offering statement or postqualification amendment thereto under 

Regulation A, entities subject to the 

periodic and the current reporting 

requirements of Regulation A, and 

private operating companies whose 

financial statements are included in 

filings with the SEC in connection with 

a business combination involving a 

shell company, including a special 

purpose acquisition company. 

Accordingly, the staff hereby amends 

the Staff Accounting Bulletin Series as 

follows: 

* * * * * 

Topic 5: Miscellaneous Accounting 

* * * * * 

The interpretations in this SAB 

express views of the staff regarding the 

accounting for entities that have 

obligations to safeguard crypto-assets 

held for their platform users.1 In recent 

years, the staff has observed an increase 

in the number of entities that provide 

platform users with the ability to 

transact in crypto-assets. In connection 

with these services, these entities and/ 

or their agents may safeguard the 

platform user’s crypto-asset(s) and also 

maintain the cryptographic key 

information necessary to access the 

crypto-asset. The obligations associated 

with these arrangements involve unique 

risks and uncertainties not present in 

arrangements to safeguard assets that are 

not crypto-assets, including 

technological, legal, and regulatory risks 

and uncertainties. Specifically: 

• Technological risks—there are risks 

with respect to both safeguarding of 

assets and rapidly-changing cryptoassets in the market that are not present 

with other arrangements to safeguard 

assets for third parties; 

• Legal risks—due to the unique 

characteristics of the assets and the lack 

of legal precedent, there are significant 

legal questions surrounding how such 

arrangements would be treated in a 

court proceeding arising from an 

adverse event (e.g., fraud, loss, theft, or 

bankruptcy); and 

• Regulatory risks—as compared to 

many common arrangements to 

safeguard assets for third parties, there 

are significantly fewer regulatory 

requirements for holding crypto-assets 

for platform users or entities may not be 

complying with regulatory requirements 

that do apply, which results in 

increased risks to investors in these 

entities. 

These risks can have a significant 

impact on the entity’s operations and 

financial condition. The staff believes 

that the recognition, measurement, and 

disclosure guidance in this SAB will 

enhance the information received by 

investors and other users of financial 

statements about these risks, thereby 

assisting them in making investment 

and other capital allocation decisions. 

FF. Accounting for Obligations To 

Safeguard Crypto-Assets an Entity 

Holds for Its Platform Users 

Facts: Entity A’s 2 business includes 

operating a platform that allows its 

users to transact in crypto-assets.3 Entity 

A also provides a service where it will 

safeguard the platform users’ cryptoassets,4 including maintaining the 

cryptographic key information 5

necessary to access the crypto-assets. 

Entity A also maintains internal 

recordkeeping of the amount of cryptoassets held for the benefit of each 

platform user. Entity A secures these 

crypto-assets and protects them from 

loss or theft, and any failure to do so 

exposes Entity A to significant risks, 

including a risk of financial loss. The 

platform users have the right to request 

that Entity A transact in the crypto-asset 

on the user’s behalf (e.g., to sell the 

crypto-asset and provide the user with 

the fiat currency (cash) proceeds 

associated with the sale) or to transfer 

the crypto-asset to a digital wallet for 

which Entity A does not maintain the 

cryptographic key information. 


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Federal Register / Vol. 87, No. 69 / Monday, April 11, 2022 / Rules and Regulations 21017 

6See generally Report of the Attorney General’s 

Cyber Digital Task Force: Cryptocurrency 

Enforcement Framework (Oct. 2020), at 15–16, 

available at https://www.justice.gov/ag/page/file/ 

1326061/download. 

7For U.S. generally accepted accounting 

principles (‘‘U.S. GAAP’’), refer to glossary 

definition provided in Financial Accounting 

Standards Board (‘‘FASB’’) Accounting Standards 

Codification (‘‘ASC’’) Topic 820. For International 

Financial Reporting Standards (‘‘IFRS’’), refer to 

glossary definition provided in IFRS 13. 

8The asset recognized is similar in nature to an 

indemnification asset as described in FASB ASC 

805 and IFRS 3. The measurement of the asset is 

on the same basis as the crypto-asset safeguarding 

liability assumed by the entity. The asset 

recognized by the entity is separate and distinct 

from the crypto-asset itself that has been transferred 

to and then held for the platform user. 

9Similar to the guidance in FASB ASC 805 and 

IFRS 3, Entity A would need to evaluate whether 

any potential loss events, such as theft, impact the 

measurement of the asset. 10For U.S. GAAP, see FASB ASC 275–10–50. For 

IFRS, see IAS 1. 11For U.S. GAAP, see FASB ASC 820. For IFRS, 

see IFRS 13. 

12For U.S. GAAP, see FASB ASC 235–10–50. For 

IFRS, see IAS 1. 

13See, e.g., Item 101 of Regulation S–K; Item 105 

of Regulation S–K; Item 303 of Regulation S–K. 

14For example, a calendar year-end company that 

submits a registration statement in January 2023 

including financial statements as of and for the 

fiscal year ending December 31, 2021 and as of and 

Continued 

However, execution and settlement of 

transactions involving the platform 

users’ crypto-assets may depend on 

actions taken by Entity A. 

Question 1: How should Entity A 

account for its obligations to safeguard 

crypto-assets held for platform users? 

Interpretive Response: The ability of 

Entity A’s platform users to obtain 

future benefits from crypto-assets in 

digital wallets where Entity A holds the 

cryptographic key information is 

dependent on the actions of Entity A to 

safeguard the assets. Those actions 

include securing the crypto-assets and 

the associated cryptographic key 

information and protecting them from 

loss, theft, or other misuse. The 

technological mechanisms supporting 

how crypto-assets are issued, held, or 

transferred, as well as legal 

uncertainties regarding holding cryptoassets for others, create significant 

increased risks to Entity A, including an 

increased risk of financial loss.6

Accordingly, as long as Entity A is 

responsible for safeguarding the cryptoassets held for its platform users, 

including maintaining the cryptographic 

key information necessary to access the 

crypto-assets, the staff believes that 

Entity A should present a liability on its 

balance sheet to reflect its obligation to 

safeguard the crypto-assets held for its 

platform users. 

As Entity A’s loss exposure is based 

on the significant risks associated with 

safeguarding the crypto-assets held for 

its platform users, the staff believes it 

would be appropriate to measure this 

safeguarding liability at initial 

recognition and each reporting date at 

the fair value 7 of the crypto-assets that 

Entity A is responsible for holding for 

its platform users. The staff also believes 

it would be appropriate for Entity A to 

recognize an asset 8 at the same time that 

it recognizes the safeguarding liability, 

measured at initial recognition and each 

reporting date at the fair value of the 

crypto-assets held for its platform 

users.9

Question 2: Assume the same facts as 

Question 1. What disclosures would the 

staff expect Entity A to provide 

regarding its safeguarding obligations 

for crypto-assets held for its platform 

users? 

Interpretive Response: In light of the 

significant risks and uncertainties 

associated with safeguarding cryptoassets, including the risks of loss 

associated with holding the 

cryptographic key information 

necessary to secure and transact in the 

crypto-asset, the staff believes the notes 

to the financial statements should 

include clear disclosure of the nature 

and amount of crypto-assets that Entity 

A is responsible for holding for its 

platform users, with separate disclosure 

for each significant crypto-asset, and the 

vulnerabilities Entity A has due to any 

concentration in such activities.10 In 

addition, because the crypto-asset 

safeguarding liabilities and the 

corresponding assets are measured at 

the fair value of the crypto-assets held 

for its platform users, the entity would 

be required to include disclosures 

regarding fair value measurements.11

The accounting for the liabilities and 

corresponding assets should be 

described in the footnotes to the 

financial statements.12 In providing 

these disclosures, Entity A should 

consider disclosure about who (e.g., the 

company, its agent, or another third 

party) holds the cryptographic key 

information, maintains the internal 

recordkeeping of those assets, and is 

obligated to secure the assets and 

protect them from loss or theft. 

Disclosures regarding the significant 

risks and uncertainties associated with 

the entity holding crypto-assets for its 

platform users may also be required 

outside the financial statements under 

existing Commission rules, such as in 

the description of business, risk factors, 

or management’s discussion and 

analysis of financial condition and 

results of operation.13 For example, to 

the extent it is material, Entity A may 

need to provide disclosure describing 

the types of loss or additional 

obligations that could occur, including 

customer or user discontinuation or 

reduction of use of services, litigation, 

reputational harm, and regulatory 

enforcement actions and additional 

restrictions. A discussion of the analysis 

of the legal ownership of the cryptoassets held for platform users, including 

whether they would be available to 

satisfy general creditor claims in the 

event of a bankruptcy should be 

considered. Further, Entity A may need 

to provide disclosure of the potential 

impact that the destruction, loss, theft, 

or compromise or unavailability of the 

cryptographic key information would 

have to the ongoing business, financial 

condition, operating results, and cash 

flows of the entity. As part of this 

disclosure, Entity A should also 

consider including, to the extent 

material, information about riskmitigation steps the entity has put in 

place (e.g., insurance coverage directly 

related to the crypto-assets held for 

platform users). 

Question 3: How and when should 

Company A initially apply the guidance 

in this Topic in its financial statements? 

Interpretive Response: The staff 

would expect an entity that files reports 

pursuant to Section 13(a) or Section 

15(d) of the Exchange Act, or an entity 

required to file periodic and current 

reports pursuant to Rule 257(b) of 

Regulation A, to apply the guidance in 

Topic 5.FF no later than its financial 

statements covering the first interim or 

annual period ending after June 15, 

2022, with retrospective application as 

of the beginning of the fiscal year to 

which the interim or annual period 

relates. 

The staff expects all other entities, 

including but not limited to entities 

conducting an initial registration of 

securities under the Securities Act or 

Exchange Act, entities conducting an 

offering of securities under Regulation 

A, and private operating companies 

entering into a business combination 

transaction with a shell company, 

including a special purpose acquisition 

company, to apply the guidance in 

Topic 5.FF beginning with their next 

submission or filing with the SEC (e.g., 

the initial or next amendment of the 

registration statement, proxy statement, 

or Form 1–A), with retrospective 

application, at a minimum, as of the 

beginning of the most recent annual 

period ending before June 15, 2022, 

provided the filing also includes a 

subsequent interim period that also 

reflects application of this guidance.14 If 


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21018 Federal Register / Vol. 87, No. 69 / Monday, April 11, 2022 / Rules and Regulations 

for the nine months ended September 30, 2022 

would apply the SAB to those periods. 

15For U.S. GAAP, see FASB ASC 250–10–50–1 

through 50–3; for IFRS, see IAS 8. See also, e.g., 

Item 302 of Regulation S–K and PCAOB Auditing 

Standard 2820 (par. 8). 

the filing does not include a subsequent 

interim period that also reflects 

application of this guidance, then the 

staff expects it to be applied 

retrospectively to the beginning of the 

two most recent annual periods ending 

before June 15, 2022. 

For all entities, in the financial 

statements that reflect the initial 

application of this guidance, the effect 

of the initial application should be 

reported in the carrying amounts of 

assets and liabilities as of the beginning 

of the annual period specified above. 

Entities should include clear disclosure 

of the effects of the initial application of 

this guidance.15

[FR Doc. 2022–07196 Filed 4–8–22; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Part 573 

[Docket No. FDA–2011–F–0365] 

Food Additives Permitted in Feed and 

Drinking Water of Animals; Methyl 

Esters of Conjugated Linoleic Acid 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Final rule. 

SUMMARY: The Food and Drug 

Administration (FDA, we, or the 

Agency) is amending the regulations for 

food additives permitted in feed and 

drinking water of animals to provide for 

the safe use of methyl esters of 

conjugated linoleic acid for early 

lactation dairy cows to reduce the 

energy concentration in milk. This 

action is in response to a food additive 

petition filed by BASF Corp. 

DATES: This rule is effective April 11, 

2022. See section V of this document for 

further information on the filing of 

objections. Submit either electronic or 

written objections and requests for a 

hearing on the final rule by May 11, 

2022. 

ADDRESSES: You may submit objections 

and requests for a hearing as follows. 

Please note that late, untimely filed 

objections will not be considered. 

Electronic objections must be submitted 

on or before May 11, 2022. The https:// 

www.regulations.gov electronic filing 

system will accept objections until 

11:59 p.m. Eastern Time at the end of 

May 11, 2022. Objections received by 

mail/hand delivery/courier (for written/ 

paper submissions) will be considered 

timely if they are postmarked or the 

delivery service acceptance receipt is on 

or before that date. 

Electronic Submissions 

Submit electronic objections in the 

following way: 

• Federal eRulemaking Portal: 

https://www.regulations.gov. Follow the 

instructions for submitting objections. 

Objections submitted electronically, 

including attachments, to https://

www.regulations.gov will be posted to 

the docket unchanged. Because your 

objection will be made public, you are 

solely responsible for ensuring that your 

objection does not include any 

confidential information that you or a 

third party may not wish to be posted, 

such as medical information, your or 

anyone else’s Social Security number, or 

confidential business information, such 

as a manufacturing process. Please note 

that if you include your name, contact 

information, or other information that 

identifies you in the body of your 

objection, that information will be 

posted on https://www.regulations.gov. 

• If you want to submit an objection 

with confidential information that you 

do not wish to be made available to the 

public, submit the objection as a 

written/paper submission and in the 

manner detailed (see ‘‘Written/Paper 

Submissions’’ and ‘‘Instructions’’). 

Written/Paper Submissions 

Submit written/paper submissions as 

follows: 

• Mail/Hand Delivery/Courier (for 

written/paper submissions): Dockets 

Management Staff (HFA–305), Food and 

Drug Administration, 5630 Fishers 

Lane, Rm. 1061, Rockville, MD 20852. 

• For written/paper objections 

submitted to the Dockets Management 

Staff, FDA will post your objection, as 

well as any attachments, except for 

information submitted, marked and 

identified, as confidential, if submitted 

as detailed in ‘‘Instructions.’’ 

Instructions: All submissions received 

must include the Docket No. FDA– 

2011–F–0365 for ‘‘Food Additives 

Permitted in Feed and Drinking Water 

of Animals; Methyl Esters of Conjugated 

Linoleic Acid; Silicon Dioxide.’’ 

Received objections, those filed in a 

timely manner (see ADDRESSES), will be 

placed in the docket and, except for 

those submitted as ‘‘Confidential 

Submissions,’’ publicly viewable at 

https://www.regulations.gov or at the 

Dockets Management Staff between 9 

a.m. and 4 p.m., Monday through 

Friday, 240–402–7500. 

• Confidential Submissions—To 

submit an objection with confidential 

information that you do not wish to be 

made publicly available, submit your 

objections only as a written/paper 

submission. You should submit two 

copies in total. One copy will include 

the information you claim to be 

confidential with a heading or cover 

note that states ‘‘THIS DOCUMENT 

CONTAINS CONFIDENTIAL 

INFORMATION.’’ The Agency will 

review this copy, including the claimed 

confidential information, in its 

consideration of objections. The second 

copy, which will have the claimed 

confidential information redacted/ 

blacked out, will be available for public 

viewing and posted on https://

www.regulations.gov. Submit both 

copies to the Dockets Management Staff. 

If you do not wish your name and 

contact information to be made publicly 

available, you can provide this 

information on the cover sheet and not 

in the body of your objections and you 

must identify this information as 

‘‘confidential.’’ Any information marked 

as ‘‘confidential’’ will not be disclosed 

except in accordance with 21 CFR 10.20 

and other applicable disclosure law. For 

more information about FDA’s posting 

of comments to public dockets, see 80 

FR 56469, September 18, 2015, or access 

the information at: https://

www.govinfo.gov/content/pkg/FR-2015- 

09-18/pdf/2015-23389.pdf. 

Docket: For access to the docket to 

read background documents or the 

electronic and written/paper objections 

received, go to https://

www.regulations.gov and insert the 

docket number, found in brackets in the 

heading of this document, into the 

‘‘Search’’ box and follow the prompts 

and/or go to the Dockets Management 

Staff, 5630 Fishers Lane, Rm. 1061, 

Rockville, MD 20852, 240–402–7500. 

FOR FURTHER INFORMATION CONTACT: 

Megan Hall, Center for Veterinary 

Medicine, Food and Drug 

Administration, 7519 Standish Pl. 

(HFV–221), Rockville, MD 20855, 301– 

796–3801, Megan.Hall@fda.hhs.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In a document published in the 

Federal Register of June 6, 2011 (76 FR 

32332), FDA announced that we had 

filed a food additive petition (animal 

use) (FAP 2269) submitted by BASF 

Corp., 100 Campus Dr., Florham Park, 

NJ 07932. The petition proposed that 

the regulations for food additives 

permitted in feed and drinking water of 


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