The SEC has repealed SAB 121, ending a saga involving a congressional bill and a presidential veto. This opens new possibilities for traditional financial institutions, that are now free to offer crypto services involving custody to their customers.

SEC Repeals SAB 121, Opens New Era for Crypto in Traditional Finance

One of the last obstacles barring cryptocurrency assets from going mainstream might have been lifted. The Securities and Exchange Commission (SEC), under the leadership of acting chair Mark T. Uyeda, has withdrawn the guidance issued in Staff Account Bulletin 121 (SAB 121), which barred banks from offering crypto services due to the commission’s requirements.

In its latest Staff Account Bulletin 122, the commission declares that it “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 bulletin, first introduced in March 2022, was criticized for its pernicious effect on the advancement of crypto in banking environments. It forced these environments to consider crypto volumes as part of the banks’ balance sheet, with associated high-cost implications.