🚨SEC Withdraws SAB 121!

Gensler’s Exit Sparks Change!

Jan 24, 2025

The US SEC has officially rescinded Staff Accounting Bulletin No. 121 (SAB 121), which required companies to classify crypto assets held for clients as liabilities. This decision comes shortly after Gary Gensler’s departure as SEC Chair and is seen as a move toward lessening the regulatory burden on crypto businesses.

The rule faced criticism for increasing compliance costs and discouraging banks from offering crypto custody services. With its removal, the SEC now encourages companies to follow existing accounting standards like FASB or IAS for reporting crypto assets.

Industry and Lawmakers Support the Move

The crypto industry and banks have praised the SEC’s decision. Hester Peirce, the SEC Commissioner leading the new crypto unit, called the rule a barrier to innovation. Lawmakers who opposed the rule, including Senator Cynthia Lummis, also celebrated its repeal as a win for the sector.

A Shift in SEC Leadership and Crypto Regulation

Mark Uyeda, the new acting SEC Chair, is steering the agency in a new direction. Under his leadership, the SEC has formed a crypto task force led by Hester Peirce to provide clearer and more predictable regulations for digital assets. This marks a departure from Gensler’s approach, which was criticized for relying heavily on enforcement actions.

SEC Crypto Enforcement Actions Drop in 2024

In addition to rescinding SAB 121, the SEC’s enforcement actions related to crypto dropped significantly in 2024. According to Cornerstone Research, the SEC launched only 33 crypto-related actions last year, a 30% decrease from the previous year.

Comparison of SEC administrations. Source: Cornerstone Research

A New Era for Crypto Regulation

With the withdrawal of SAB 121 and a decline in enforcement actions, the SEC is signaling a more balanced approach to crypto regulation. This shift is seen as a positive step for innovation and growth in the digital asset space.

Currently Bitcoin Price trading at $105,790.49 as per Coinpedia Market data.