In a landmark decision, the US Securities and Exchange Commission (SEC) Officially cancelled Staff Accounting Bulletin (SAB) No. 121, a controversial rule that has long hindered banks from offering bitcoin and crypto custody services. The move, announced Thursday, signals a major shift in the SEC’s approach to regulating Bitcoin and Crypto and paves the way for greater financial integration.
Breakdown: 🇺🇸 SEC officially repeals SAB 121, which barred banks from detaining #bitcoin pic.twitter.com/vcnggkcgml
– Bitcoin Magazine (pitcoinmagazine) January 23, 2025
Introduced in March 2022 under the leadership of former SEC Chairman Gary Gensler, SAB 121 required institutions that hold Bitcoin and Crypto assets for clients to record those holdings as liabilities on their balance sheets. This accounting standard creates significant operational and financial burdens for banks and custodians, effectively discouraging them from providing Bitcoin-related services. The rule has been widely criticized by the crypto industry and lawmakers, with SEC Commissioner Hester Peirce calling it “weed” in April 2023.
“Bye, bye Saab 121! It was not fun,” Pierce said He wrote in a post on x (formerly Twitter) on Thursday, after the SEC issued Accounting Bulletin No. 122, formally rescinding the guidance.
The SEC’s move to repeal SAB 121 comes just days after Gensler’s resignation and marks the start of a new era under Republic’s leadership. Acting SEC Chairman Mark Ueda, who assumed the role on Monday, Announce quickly Formation of a crypto task force led by Peirce to formulate clearer and practical regulatory frameworks for the industry.
“To date, the SEC has relied primarily on enforcement actions to regulate crypto ex post and interactively, often adopting new and untested legal interpretations along the way,” the agency acknowledged. In a statement Tuesday.
With the removal of SAB 121, major banks are now expected to move quickly to integrate Bitcoin and Crypto custody services into their offerings. This is an important milestone in Bitcoin’s discretion, bringing it closer to mainstream adoption.