In a landmark determination, the U.S. Securities and Alternate Fee (SEC) has formally rescinded Employees Accounting Bulletin (SAB) No. 121, a controversial rule that had lengthy hindered banks from providing bitcoin and crypto custody providers. This transfer, introduced on Thursday, alerts a major shift within the SEC’s method to regulating bitcoin and crypto and paves the best way for larger monetary integration.
BREAKING: 🇺🇸 SEC OFFICIALLY RESCINDS SAB 121, WHICH PREVENTED BANKS FROM CUSTODYING #BITCOIN pic.twitter.com/VCnggkCGmL
— Bitcoin Journal (@BitcoinJournal) January 23, 2025
Launched in March 2022 beneath former SEC Chair Gary Gensler, SAB 121 required establishments holding bitcoin and crypto belongings for patrons to document these holdings as liabilities on their stability sheets. This accounting commonplace created important operational and monetary burdens for banks and custodians, successfully discouraging them from offering bitcoin-related providers. The rule was extensively criticized by the crypto business and lawmakers, with SEC Commissioner Hester Peirce famously calling it a “pernicious weed” in April 2023.
“Bye, bye SAB 121! It’s not been fun,” Peirce wrote in a publish on X (previously Twitter) on Thursday, following the SEC’s issuance of Employees Accounting Bulletin No. 122, which formally rescinds the steering.
The SEC’s transfer to rescind SAB 121 comes simply days after Gensler’s resignation and marks the beginning of a brand new period beneath Republican management. Appearing SEC Chair Mark Uyeda, who assumed the function on Monday, rapidly introduced the formation of a crypto activity power led by Peirce to craft clearer and extra sensible regulatory frameworks for the business.
“To date, the SEC has relied primarily on enforcement actions to regulate crypto retroactively and reactively, often adopting novel and untested legal interpretations along the way,” the company acknowledged in an announcement on Tuesday.
With the elimination of SAB 121, main banks are actually anticipated to maneuver swiftly to combine bitcoin and crypto custody providers into their choices. This can be a important milestone within the financialization of bitcoin, bringing it nearer to mainstream adoption.
