The U.S. Securities and Exchange Commission (SEC) has taken a significant step in reshaping the crypto space by officially repealing Staff Accounting Bulletin No. 121 (SAB 121), which previously restricted banks from providing cryptocurrency custodial services.
Bye, bye SAB 121! It’s not been fun: https://t.co/cIwUc0isUE | Staff Accounting Bulletin No. 122
— Hester Peirce (@HesterPeirce) January 23, 2025
Following the repeal, the SEC issued SAB 122, which outlines the updated guidance. According to the bulletin, “This staff accounting bulletin (‘SAB’) rescinds the interpretive guidance included in Section FF of Topic 5 in the Staff Accounting Bulletin Series entitled Accounting for Obligations to Safeguard Crypto-Assets an Entity Holds for its Platform Users.”
The repeal of SAB 121 was a priority for the new Donald Trump administration and the revamped SEC leadership. Introduced in 2022, SAB 121 required companies holding cryptocurrencies to list these assets on their balance sheets and disclose associated risks. This guidance applied to all SEC-regulated entities, particularly banks and financial institutions, creating higher capital requirements that limited their ability to offer cryptocurrency custody services.
Shortly after the announcement, JP Morgan became one of the first institutions to capitalize on the regulatory change, launching its “crypto custody services” to meet market demand.
The development has garnered significant attention, especially as it coincides with a series of executive orders signed by President Trump on his first day in office.
Republican Senator Cynthia Lummis shared her views on the repeal via X , stating: “SAB 121 was disastrous for the banking industry and only stunted American innovation and advancement of digital assets. I am THRILLED to see it repealed and get the SEC back on track to fulfilling its intended mission.”
Also Read: Ripple vs. SEC: Better Markets Files an Amicus Brief & Backs SEC