Pakinomist– The Securities and Exchange Commission, under new leadership chosen by President Donald Trump, announced the withdrawal of a controversial framework that outlined strict disclosure requirements for financial firms holding crypto.
The SEC issued Staff Accounting Bulletin (SAB) 122, which repeals SAB 121 and allows financial institutions that hold crypto on behalf of their clients to determine whether to declare the held digital assets as a liability.
SAB 121 required crypto custody providers and exchanges to treat client holdings as both an asset and a liability, the latter based on the high risk associated with holding crypto.
But this was a major problem for crypto firms, which had opposed the bulletin due to its alleged complication of accounting practices, which also served to limit firms from holding crypto. SAB 121 — which was to be implemented in 2022 — was also overturned by Congress, but was kept in place by a veto from former President Joe Biden.
“Goodbye, goodbye SAB 121! It hasn’t been fun,” SEC Commissioner Hester Peirce said in a social media post.
The repeal of SAB 121, which fell under Acting SEC Chairman Mark Uyeda, reflects Trump’s friendlier stance on digital assets that the president had touted during his campaign.
Uyeda had also publicly opposed SAB 121 during former SEC Chairman Gary Gensler’s tenure. Gensler — who had carried out a largely enforcement-driven stance on crypto — resigned from the SEC earlier this week.
Earlier this week, the SEC announced the formation of a task force aimed at helping inform crypto regulation. Trump also signed an executive order calling for the creation of a national reserve of digital assets, although he did not explicitly mention .
