In a landmark resolution, the U.S. Securities and Trade Fee (SEC) has formally rescinded Workers Accounting Bulletin (SAB) No. 121, a controversial rule that had lengthy hindered banks from providing bitcoin and crypto custody companies.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, indicators a big shift within the SEC’s method 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 below former SEC Chair Gary Gensler, SAB 121 required establishments holding bitcoin and crypto belongings for patrons to file these holdings as liabilities on their stability sheets. This accounting customary created vital operational and monetary burdens for banks and custodians, successfully discouraging them from offering bitcoin-related companies. The rule was extensively criticized by the crypto trade 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 Workers 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 below Republican management. Performing SEC Chair Mark Uyeda, who assumed the function on Monday, shortly introduced the formation of a crypto process drive led by Peirce to craft clearer and extra sensible regulatory frameworks for the trade.
“Up to now, the SEC has relied totally on enforcement actions to control crypto retroactively and reactively, typically adopting novel and untested authorized interpretations alongside the way in which,” the company acknowledged in an announcement on Tuesday.
With the elimination of SAB 121, main banks at the moment are anticipated to maneuver swiftly to combine bitcoin and crypto custody companies into their choices. This can be a vital milestone within the financialization of bitcoin, bringing it nearer to mainstream adoption.
