Investing.com-- The Securities and Exchange Commission, under new leadership chosen by President Donald Trump, announced the withdrawal of a controversial framework that outlined strict disclosure requirements for financial firms holding crypto.
The SEC issued Staff Accounting Bulletin (SAB) 122, which rescinds SAB 121 and allows financial institutions that hold crypto on behalf of their customers to determine whether to declare the held digital assets as a liability.
SAB 121 required crypto custody providers and exchanges to treat customer holdings as both an asset and as a liability, with the latter being based on the high risk associated with holding crypto.
But this was a major sticking point for crypto firms, who had opposed the bulletin due to its alleged complication of accounting practices, which also served to restrict firms from holding crypto. SAB 121- which was implemented in 2022- was also overturned by Congress, but was kept in place by a veto by former President Joe Biden.
“Bye, bye SAB 121! It’s not been fun,” SEC Commissioner Hester Peirce said in a social media post.
The rescinding of SAB 121- which came under acting SEC Chair Mark Uyeda, reflects Trump’s friendlier stance towards digital assets, which the President had touted during his campaigning.
Uyeda had also publicly opposed SAB 121 during former SEC Chair Gary Gensler’s term. Gensler- who had carried out a largely enforcement-driven stance on crypto- stepped down from the SEC earlier this week.
The SEC earlier this week announced the formation of a task force aimed at helping inform crypto regulation. Trump also signed an executive order calling for the formation of a national digital assets reserve, although he did not explicitly mention Bitcoin.