Ability for US banks to custody Bitcoin opened up as SEC retires SAB 121
The US Securities and Exchange Commission (SEC) has introduced Staff Accounting Bulletin (SAB) 122, replacing the criticized SAB 121. SAB 121 required firms to classify customer assets as liabilities, complicating crypto custody services and deterring financial institutions. Efforts to repeal SAB 121 faced challenges, including a veto from former President Biden. SAB 122 rescinds these provisions, allowing financial institutions to follow established standards from the Financial Accounting Standards Board (FASB) or international guidelines. The SEC emphasizes transparency in disclosures regarding crypto asset safeguarding. This policy shift is seen as a move towards a more supportive regulatory environment for digital assets. The change has been welcomed by regulators and industry stakeholders, with praise from SEC Commissioner Hester Peirce and US lawmakers, who noted the positive impact on innovation and banking. Crypto leaders anticipate that the removal of SAB 121 will simplify compliance for banks offering Bitcoin custody services.
