In a landmark choice, the U.S. Securities and Change Fee (SEC) has officially rescinded Workers Accounting Bulletin (SAB) No. 121, a controversial rule that had lengthy hindered banks from providing bitcoin and crypto custody companies.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 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 property for purchasers to report these holdings as liabilities on their stability sheets. This accounting normal created important operational and monetary burdens for banks and custodians, successfully discouraging them from offering bitcoin-related companies. 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 is not been enjoyable,” Peirce wrote in a post on X (previously Twitter) on Thursday, following the SEC’s issuance of Workers 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 activity pressure led by Peirce to craft clearer and extra sensible regulatory frameworks for the business.
“Up to now, the SEC has relied totally on enforcement actions to control crypto retroactively and reactively, usually adopting novel and untested authorized interpretations alongside the way in which,” 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 important milestone within the financialization of bitcoin, bringing it nearer to mainstream adoption.
