This episode of Speaking of Bitcoin on the Coin Desk podcast network is brought to you by nexo.io.

Exchanges are finding themselves in this very weird interface between traditional finance

regulation and the brave new world of crypto.

And while being at that interface is incredibly profitable. It's also just a

morass of complications and headaches. Regulators, the quintessential bureaucrats whose job

it nominally is to be neutral arbiters, helping the public craft and then enforcing

rules to keep the playing field level while protecting consumers, are the topic of today's

show, specifically the Securities and Exchange Commission, better known as the SEC.

With a mandate to regulate investment contracts, more commonly known as securities, shares,

or equity, they've long had their sights on regulating portions of the

cryptocurrency ecosystem. But before that, introductions. My name is Adam E. Levine, and this is

speaking of Bitcoin. This time, as always, I'm joined by the other host of the show, Dr. Stephanie

Murphy. Hi. And Andreas M. Antonopoulos. Hello. Jonathan is out this week.

So, folks, let's start with the balance sheet, or at least the balance sheets of public companies. Andreas, please lead us into this one.

About a week ago, the SEC announced that crypto companies in the U.S., specifically publicly

that crypto companies, which as far as I know is really

mostly Coinbase at this moment, we'll have to take their customers' balances, the custodial

assets that they hold on behalf of customers, and add those to their balance sheets, which basically means that same with

banks, customer deposits that are ultimately owed to the customers are liabilities, and reserves

that are not owed to the customers are assets on the balance sheet.

Now, this is going to have an obvious and immediate effect of significantly increasing the balance

sheets.

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