The US Securities and Exchange Commission (SEC) has long ruled that banks should $105,174.1 and controversial Staff Accounting Bulletin (SAB) No. 121 officially repealed. This decision marks a significant change in the SEC’s approach to regulating Bitcoin and cryptocurrencies and paves the way for increased financial integration.
Change in Regulation
SAB 121, issued in March 2022 under former SEC Chairman Gary Gensler, required institutions to record holdings of bitcoin and crypto assets for customers as liabilities on the balance sheet. This accounting standard created serious operational and financial burdens for banks and custodians, thus preventing them from providing Bitcoin-related services.
The rule has been widely criticized by the crypto industry and legislatures. SEC Commissioner Hester Peirce described it as a “noxious weed” in April 2023.
“Hester Peirce on the X platform after the removal of SAB 121: ‘Goodbye SAB 121! “It wasn’t fun at all,” he wrote.
New Management and Future Plans
The SEC’s repeal of SAB 121 comes just days after Gensler’s resignation and marks the beginning of a new era under Republican rule. Interim SEC Chairman Mark Uyeda, who took office on Monday, quickly announced the creation of a crypto task force to be led by Peirce. This task force aims to create clearer and more enforceable regulatory frameworks for the industry.
“To date, the SEC has relied primarily on imposing sanctions to regulate cryptocurrencies retroactively and reactively, adopting new and untested legal interpretations in the process,” the SEC said in a statement on Tuesday.
With the repeal of SAB 121, major banks are expected to integrate Bitcoin and crypto custody services into their portfolios. This is considered an important step towards wider acceptance of Bitcoin in the financial sphere.
Integration of cryptocurrencies with the banking sector can support their wider adoption and help them gain greater foothold in financial markets.
These developments are seen as an important milestone in making cryptocurrencies more open and accessible in the regulatory environment.
Thus, while financial institutions become more willing to work with crypto assets, new opportunities are expected to arise for investors.
Finally, these changes are expected to have positive impacts on the future of crypto markets and may contribute to a more sustainable structure of the industry.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that crypto currencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
