Basri Caneri 
The U.S. Securities and Exchange Commission (SEC) has rescinded Accounting Bulletin SAB 121, which the crypto industry had long demanded be removed. This decision ended the requirement for financial institutions to show crypto assets held on behalf of clients as liabilities on their balance sheets and removed one of the biggest obstacles for banks to store Bitcoin and other digital assets.
SAB 121: A Controversial Regulation for the Crypto Industry
SAB 121 was issued by the SEC in March 2022 and required financial institutions to record digital assets held on behalf of customers as liabilities. This regulation was heavily criticized by the industry, especially for making it difficult to account for crypto assets and preventing banks from providing cryptocurrency custody services.
SEC member and crypto task force leader Hester Peirce said in a statement after the decision:
Goodbye SAB 121! You were no fun.
New Era in Crypto Accounting
A new Staff Accounting Bulletin issued on January 23, 2025 officially revoked the guidance of SAB 121. Following the decision, former Binance CEO CZ said, “The U.S. strategic reserve of Bitcoin has been largely vindicated,” emphasizing the positive effects of the repeal on the industry.
With the repeal, banks will now be able to store crypto assets directly on behalf of their customers and offer these services on a wider scale. Michael Saylor, one of the leading names, interpreted this development as “Banks are allowed to store Bitcoin”.
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Political Reactions and Support
The decision was welcomed by many crypto-friendly politicians:
- Senator Cynthia Lummis celebrated the repeal of SAB 121 by the SEC, saying, “This regulation was devastating to the banking industry and stopped American innovation. I am very happy that it has been repealed,” she said.
- Representative French Hill stated that SAB 121 was a non-standard practice in financial services and that the repeal was the right step.
A New Era at the SEC Under the Trump Administration
The repeal of SAB 121 is considered to be the first major step taken by the SEC under the Donald Trump administration regarding digital assets. The bill to repeal SAB 121 received bipartisan support in Congress in 2024 but was vetoed by then-President Joe Biden. The Trump administration quickly implemented this cancellation, paving the way for the sector.
A Big Step for American Innovation
This decision is considered part of the US efforts to re-establish its leadership in the crypto economy. The repeal of SAB 121 allows banks to expand their crypto asset custody services, further cementing the place of digital assets in the financial system. The industry sees this development as an important opportunity for innovation and growth.
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