SEC repeals crypto custody rule with SAB 122
The US Securities and Exchange Commission (SEC) has rescinded its controversial Staff Accounting Bulletin (SAB) 121, by way of SAB 122. Last week’s bulletin eliminates the previous requirement for banks and financial institutions to record customer crypto holdings as liabilities on their balance sheets.
This move reopens the door for regulated financial institutions to act as custodians for digital assets, a change long sought by many in the US banking industry.
SAB 121, introduced in 2022, faced significant criticism from both sides of the political aisle, as well as from industry groups. Now, under the leadership of Acting SEC Chair Mark Uyeda, the new administration has reversed course, enabling banks to re-enter the crypto custody space.
This shift signals a broader change in the SEC’s approach to digital assets, moving away from restrictive policies towards a more crypto-friendly stance. Alongside SAB 122, the administration has launched a government task force to review crypto regulations, while the SEC is forming its own team to clarify the legal framework for digital asset markets.
For more details on SAB 122 and its implications, see the SEC’s bulletin. And accounting commentary from Deloitte’s IAS Plus.
