SEC Commissioner Hester Peirce — two days after being named leader of a new crypto task force — revealed SAB 121 would be no more.
Staff Accounting Bulletins (SABs) are interpretations of and policies that SEC divisions follow in relation to federal securities laws disclosure requirements.
SAB-121 will be published in March 2020 by SEC. In particular, it stated that an entity “should present a liability on its balance sheet to reflect its obligation to safeguard the crypto-assets held for its platform users.”
Why is the crypto-industry so concerned about this agency’s revocation?
Cantor Fitzgerald Howard Lutnick explained the issue pretty well in a video he posted to X in September — a couple months before Trump nominated him to lead the Commerce department.
Lutnick said that there’s an misunderstanding about TradFi users not wanting to conduct transactions in bitcoin. Lutnick added that banks would need to have a client’s bitcoin in their custody. “they would have to set aside their own money equal to that amount in sort of like a jail.”
Financial organizations have told SEC Chairman Gary Gensler the bulletin is a problem. “has curbed the ability of the associations’ members to develop and bring to market at scale certain digital asset products and services.”
What is the result? This repeal is a result of the VanEck Research execs’ December 2025 predictions. “will pave the way for banks and brokers to custody spot crypto, further integrating digital assets into traditional financial infrastructure.”
Mark Palmer, a Benchmark analyst who wrote a note on Friday, argued that the SAB 121 repeal was a good thing. “represents an even more meaningful game-changer for bitcoin and the broader crypto ecosystem” A potential bitcoin strategic reserve is more valuable than an actual Bitcoin.
Joe Biden was not sent a bill to overturn the SAB 121 until last summer. He vetoed it.
Wee Mingchoon, Ava Labs’ deputy general counsel told me last year that rescinding SAB 121 was an act of “good will” A new agency could move fast. This seems to be correct.
This weekend is a time to relax, because another round of changes will surely come.
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