The US SEC has revoked a controversial rule that required financial firms that hold Bitcoin for their clients to list the assets on their balance sheets as liabilities.
The SEC said in a bulletin on January 23 that Staff Accounting Bulletin (SAB) 122 formally revoked SAB 121, a March 2022 guideline vehemently opposed by the cryptocurrency community.
Industry leaders claimed that SAB 121 complicated custody of digital assets by imposing severe reporting responsibilities.
US SEC Revokes The SAB 121 Crypto Custody Rules
As SEC Commissioner Hester Peirce noted in her joyous post on X on January 23, the rule’s repeal was welcomed: “Bye, SAB 121! It hasn’t been enjoyable.
A joint statement rejecting SAB 121 was also passed by Congress last year, but then-President Joe Biden canceled it.
Now that the “pro-crypto” Republican government has taken office, numerous regulations that the crypto business has disregarded are beginning to be lifted.
SEC Commissioner Mark Uyeda was named interim SEC head by President Donald Trump the day after officially began his second term in office. Last October, Uyeda remarked on how disastrous the SEC’s take under Gary Gensler was.
On January 23, Cornerstone Research revealed that during Gary Gensler’s last year as SEC chairman, the agency only brought 33 cryptocurrency-related actions, compared to 47 in the previous year, when the most enforcement activity occurred.
The SEC filed lawsuits against 90 Bitcoin defendants or respondents last year, including 33 businesses and 57 individuals.
What does the removal of SAB 121 mean for the cryptocurrency community?
By allowing custodians to access Bitcoin through licensed banks and financial institutions, the SEC’s removal of SAB 121 will benefit the public.
This change may increase confidence and security, giving people unfamiliar with Bitcoin wallets or self-custody a safer option. Because it is simpler for users to interact with cryptocurrency through reliable organizations, it also encourages wider adoption.
Additionally, institutional custody improves financial inclusion for those unable to construct safe digital wallets and reduces the danger of losing private keys. As the regulatory clarity that results from this revocation continues, it may inspire trust and even more involvement in the Bitcoin ecosystem.
Certain critics are worn out, but most crypto world has been cheering this revocation.
The CEO of WhaleWire, Jacob, expressed his thoughts and criticisms of the Bitcoin community’s reaction to the SEC’s recent revocation of SAB 121 in a post on X. Even though SAB 121 makes no mention of Bitcoin, he continues that the cryptocurrency industry is focusing on the announcement that banks can officially handle Bitcoin.
According to Jacob, Satoshi Nakamoto claimed that the initial Bitcoin protocol’s objective was to do away with the necessity for third-party control.
He claims that because the Bitcoin ecosystem encourages banks to hold their cryptocurrency, it feels slightly contradictory in 2025. He concludes that Bitcoin has fallen victim to delusion and greed, which portends terrible news for the community.
