Quickly understand the history and background of various well-known coins

SEC Drops Crypto Liability Rule: A New Era for Banks and Crypto Firms

Coin WorldMonday, Jan 27, 2025 3:58 am ET

1min read

The U.S. Securities and Exchange Commission (SEC) has reversed a contentious 2022 guidance that required financial institutions to classify customer-held digital asset exposures as liabilities. The move, which has been met with widespread approval from banking and cryptocurrency interests, signals a shift in the agency's stance on digital assets.

SEC Commissioner Hester Peirce, who heads the agency's crypto task force, celebrated the decision, stating, "Bye, bye SAB 121! It's not been fun." The controversial guidance, known as Staff Accounting Bulletin No. 121, had been criticized for increasing compliance costs and discouraging institutions from offering services in crypto custody.

The repeal of SAB 121 aligns with President Donald Trump's broader initiative to promote innovation and adoption in the crypto sector through friendly regulations. An executive order has been issued, and a crypto advisory council has been formed to create policies that ease the pressures of regulations on businesses dealing with cryptocurrency and digital assets.

The SEC's decision to repeal SAB 121 is seen as a potential gateway for banks and crypto firms to enter the digital asset market without facing the obstacles created by the guidance. The change simplifies reporting by removing the need to list both the assets and liabilities of customer-held digital assets, promoting a more supportive environment for offering crypto custody services and paving the way for greater integration of digital assets into traditional financial services.

In addition to repealing SAB 121, the SEC has also created a task force on crypto regulation, signaling an adaptation of its stance on digital assets in the United States. The task force will work to create an architecture with regulation that promotes innovation while maintaining necessary safeguards and creating opportunities for further cooperation between financial institutions and the crypto industry.

The SEC's action comes as the PCAOB amendment was approved for January 2025. The amendment introduces registration procedures for accounting firms with no operating practices, which will be enforced through their annual reports beginning in 2025.

Disclaimer: The news articles available on this platform are generated in whole or in part by artificial intelligence and may not have been reviewed or fact checked by human editors. While we make reasonable efforts to ensure the quality and accuracy of the content, we make no representations or warranties, express or implied, as to the truthfulness, reliability, completeness, or timeliness of any information provided. It is your sole responsibility to independently verify any facts, statements, or claims prior to acting upon them. Ainvest Fintech Inc expressly disclaims all liability for any loss, damage, or harm arising from the use of or reliance on AI-generated content, including but not limited to direct, indirect, incidental, or consequential damages.