In a landmark determination, the U.S. Securities and Change Fee (SEC) has formally rescinded Employees Accounting Bulletin (SAB) No. 121, a controversial rule that had lengthy hindered banks from providing bitcoin and crypto custody companies. This transfer, introduced on Thursday, alerts a major shift within the SEC’s strategy to regulating bitcoin and crypto and paves the way in which for larger 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 below former SEC Chair Gary Gensler, SAB 121 required establishments holding bitcoin and crypto property for patrons to document these holdings as liabilities on their stability sheets. This accounting customary 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 business 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 publish 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 below Republican management. Appearing SEC Chair Mark Uyeda, who assumed the position on Monday, rapidly introduced the formation of a crypto activity pressure led by Peirce to craft clearer and extra sensible regulatory frameworks for the business.
“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 way in which,” the company acknowledged in an announcement on Tuesday.
With the elimination of SAB 121, main banks at the moment are 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.