The Securities and Exchange Commission today issued a staff accounting bulletin reversing a previous bulletin that changed how banks and other publicly traded entities were expected to account for digital assets held in custody.
SAB 121, published in 2022, required SEC registrants to record an obligation to safeguard the crypto assets that they hold at the fair value of the related assets. The American Bankers Association had urged the commission to rescind the bulletin, saying it curbed the ability of the association’s member banks to develop and bring to market at scale certain digital asset products and services. Congress also passed a joint resolution last year to overrule SAB 121 but former President Biden vetoed it.
SAB 122 announced today rescinds SAB 121. It came the same day that President Trump announced the formation of a government task force to review and possibly ease regulation of the digital asset sector. At the same time, the SEC under Acting Chairman Mark Uyeda has launched its own task force to develop a regulatory framework for crypto assets, claiming that its past handling of the subject resulted in “confusion about what is legal, which creates an environment hostile to innovation and conducive to fraud.”
In a statement, ABA President and CEO Rob Nichols applauded the SEC’s decision.
“Since the bulletin was issued in 2022, ABA has advocated extensively with the SEC, prudential regulators and members of Congress to eliminate this misguided policy,” Nichols said. “Allowing banks to serve as custodians for digital assets ensures that consumers won’t be left only with unsupervised, poorly regulated options to safeguard these assets going forward.”
