SEC Rescinds SAB 121, Paving Way for Crypto Custody Expansion
SEC Commissioner Hester Peirce announced the discontinuation of Staff Accounting Bulletin No. 121 (SAB 121) shortly after leading a newly established crypto task force. This bulletin, introduced in March 2022, required entities to recognize liabilities for safeguarding user-held crypto-assets.
Key points:
- SAB 121's rescission is viewed positively by the crypto industry.
- Financial institutions had reported that SAB 121 limited their ability to develop digital asset products.
- VanEck research indicated this change would facilitate banks and brokers in custodying spot crypto.
- Analysts consider this repeal more impactful for the crypto ecosystem than potential strategic bitcoin reserves.
- The move follows previous congressional attempts to overturn the bulletin, which President Biden vetoed.
Overall, the SEC's action is seen as a step towards integrating digital assets into traditional financial systems.