SEC Withdraws SAB 121, Replacing It with SAB 122 Guidance

The U.S. Securities and Exchange Commission (SEC) has withdrawn its Staff Accounting Bulletin 121 (SAB 121), which required banks and public companies to include customers' crypto assets on their balance sheets. The new bulletin, SAB 122, instructs firms to follow Financial Accounting Standards Board rules or International Accounting Standard provisions instead.

SAB 121 was previously supported by former SEC Chair Gary Gensler, who argued it aimed to protect investors during bankruptcies.
Criticism from the crypto industry led to a Congressional Review Act resolution against SAB 121, which was vetoed by former President Biden.
SEC Commissioner Hester Peirce, now leading a new crypto task force, opposed SAB 121, stating it lacked guidance on securities laws for crypto.
Peirce announced the withdrawal of SAB 121.

The SEC emphasizes the need for firms to disclose obligations related to safeguarding crypto-assets held for others.