The U.S. Securities and Alternate Fee (SEC) has taken a big step in reshaping the crypto area by formally repealing Workers Accounting Bulletin No. 121 (SAB 121), which beforehand restricted banks from offering cryptocurrency custodial providers.
SEC Repeals SAB 121
Bye, bye SAB 121! It’s not been enjoyable: https://t.co/cIwUc0isUE | Workers Accounting Bulletin No. 122
— Hester Peirce (@HesterPeirce) January 23, 2025
Following the repeal, the SEC issued SAB 122, which outlines the up to date steerage. Based on the bulletin, “This employees accounting bulletin (‘SAB’) rescinds the interpretive steerage included in Part FF of Subject 5 within the Workers Accounting Bulletin Collection entitled Accounting for Obligations to Safeguard Crypto-Belongings an Entity Holds for its Platform Customers.”
The repeal of SAB 121 was a precedence for the brand new Donald Trump administration and the revamped SEC management. Launched in 2022, SAB 121 required firms holding cryptocurrencies to checklist these property on their stability sheets and disclose related dangers. This steerage utilized to all SEC-regulated entities, notably banks and monetary establishments, creating increased capital necessities that restricted their skill to supply cryptocurrency custody providers.
Shortly after the announcement, JP Morgan turned one of many first establishments to capitalize on the regulatory change, launching its “crypto custody providers” to fulfill market demand.
The event has garnered vital consideration, particularly because it coincides with a sequence of government orders signed by President Trump on his first day in workplace.
Republican Senator Cynthia Lummis shared her views on the repeal through X , stating: “SAB 121 was disastrous for the banking trade and solely stunted American innovation and development of digital property. I’m THRILLED to see it repealed and get the SEC again on observe to fulfilling its meant mission.”
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