PakGazette– 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 companies that hold cryptocurrencies.
The SEC issued Staff Accounting Bulletin (SAB) 122, which rescinds SAB 121 and allows financial institutions that hold cryptocurrency on behalf of their clients to determine whether to report held digital assets as a liability.
SAB 121 required cryptocurrency custodian providers and exchanges to treat customer holdings as an asset and a liability, with the latter based on the high risk associated with holding cryptocurrency.
But this was a major sticking point for cryptocurrency companies, which had opposed the bulletin due to its alleged complication of accounting practices, which also served to restrict companies’ holding of cryptocurrencies. SAB 121, which was implemented in 2022, was also repealed by Congress but remained in effect thanks to former President Joe Biden’s veto.
“Goodbye, goodbye SAB 121! It hasn’t been fun,” SEC Commissioner Hester Peirce said in a social media post.
The rescission of SAB 121, which was led by acting SEC Chairman Mark Uyeda, reflects Trump’s friendlier stance toward digital assets, which the president had touted during his campaign.
Uyeda had also publicly opposed SAB 121 during former SEC Chairman Gary Gensler’s tenure. Gensler, who had taken a largely enforcement-driven stance on cryptocurrencies, resigned from the SEC earlier this week.
The SEC announced earlier this week the formation of a working group intended to help inform cryptocurrency regulation. Trump also signed an executive order calling for the formation of a national reserve of digital assets, although he did not explicitly mention it.
