In a landmark determination, the U.S. Securities and Trade Fee (SEC) has formally rescinded Employees Accounting Bulletin (SAB) No. 121, a controversial rule that had lengthy hindered banks from providing bitcoin and crypto custody providers. This transfer, introduced on Thursday, indicators a big shift within the SEC’s strategy to regulating bitcoin and crypto and paves the way in which for higher 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 patrons to report these holdings as liabilities on their steadiness sheets. This accounting customary created vital operational and monetary burdens for banks and custodians, successfully discouraging them from offering bitcoin-related providers. 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 submit 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. Appearing SEC Chair Mark Uyeda, who assumed the function on Monday, rapidly introduced the formation of a crypto activity power 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 manage crypto retroactively and reactively, typically adopting novel and untested authorized interpretations alongside the way in which,” the company acknowledged in a press release on Tuesday.
With the removing of SAB 121, main banks at the moment are anticipated to maneuver swiftly to combine bitcoin and crypto custody providers into their choices. It is a vital milestone within the financialization of bitcoin, bringing it nearer to mainstream adoption.
