In a landmark choice, the U.S. Securities and Change Fee (SEC) has formally rescinded Employees Accounting Bulletin (SAB) No. 121, a controversial rule that had lengthy hindered banks from providing bitcoin and crypto custody providers. This transfer, introduced on Thursday, alerts a major shift within the SEC’s method to regulating bitcoin and crypto and paves the best way 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 underneath former SEC Chair Gary Gensler, SAB 121 required establishments holding bitcoin and crypto property for patrons to document 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 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 isn’t 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 steering.
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 position on Monday, shortly introduced the formation of a crypto process power led by Peirce to craft clearer and extra sensible regulatory frameworks for the business.
“So far, the SEC has relied totally on enforcement actions to control crypto retroactively and reactively, typically adopting novel and untested authorized interpretations alongside the best way,” the company acknowledged in a press release on Tuesday.
With the elimination 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.
