In a landmark choice, the U.S. Securities and Change Fee (SEC) has officially rescinded Employees Accounting Bulletin (SAB) No. 121, a controversial rule that had lengthy hindered banks from providing bitcoin and crypto custody companies. This transfer, introduced on Thursday, alerts a big shift within the SEC’s method to regulating bitcoin and crypto and paves the best way for better monetary integration.
BREAKING: 🇺🇸 SEC OFFICIALLY RESCINDS SAB 121, WHICH PREVENTED BANKS FROM CUSTODYING #BITCOIN pic.twitter.com/VCnggkCGmL
— Bitcoin Journal (@BitcoinMagazine) January 23, 2025
Launched in March 2022 underneath former SEC Chair Gary Gensler, SAB 121 required establishments holding bitcoin and crypto belongings for patrons to report these holdings as liabilities on their stability sheets. This accounting normal created vital operational and monetary burdens for banks and custodians, successfully discouraging them from offering bitcoin-related companies. The rule was broadly criticized by the crypto trade and lawmakers, with SEC Commissioner Hester Peirce famously calling it a “pernicious weed” in April 2023.
“Bye, bye SAB 121! It is not been enjoyable,” Peirce wrote in a post on X (previously Twitter) on Thursday, following the SEC’s issuance of Employees Accounting Bulletin No. 122, which formally rescinds the steerage.
The SEC’s transfer to rescind SAB 121 comes simply days after Gensler’s resignation and marks the beginning of a brand new period underneath Republican management. Performing SEC Chair Mark Uyeda, who assumed the function on Monday, quickly announced the formation of a crypto process power led by Peirce to craft clearer and extra sensible regulatory frameworks for the trade.
“To this point, the SEC has relied totally on enforcement actions to manage crypto retroactively and reactively, typically adopting novel and untested authorized interpretations alongside the best way,” the company acknowledged in a statement on Tuesday.
With the elimination of SAB 121, main banks are actually anticipated to maneuver swiftly to combine bitcoin and crypto custody companies into their choices. This can be a vital milestone within the financialization of bitcoin, bringing it nearer to mainstream adoption.
