Story perspectives

SEC Eases Crypto Rules, Boosts Banking Innovation

1/24/2025

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Summary

Story summary

The SEC has revoked Staff Accounting Bulletin 121, which mandated banks to treat crypto assets as liabilities.
The newly introduced SAB 122 permits banks to apply standard accounting principles for crypto custody, reducing regulatory pressures.
This adjustment is viewed as beneficial for the crypto industry, fostering innovation and encouraging wider engagement in digital asset markets.
SEC Commissioner Hester Peirce and Senator Cynthia Lummis commended the repeal for its favorable effects on the banking sector.

History

Historical Context

The SEC's repeal of Staff Accounting Bulletin 121 echoes past regulatory shifts, notably the 2008 financial crisis. Then, accounting standards were criticized for enabling risky asset valuations. Today's changes aim to foster innovation in crypto, reflecting a historical trend of adapting regulations to emerging financial landscapes.

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Story summary

The SEC has revoked Staff Accounting Bulletin 121, which mandated banks to treat crypto assets as liabilities.
The newly introduced SAB 122 permits banks to apply standard accounting principles for crypto custody, reducing regulatory pressures.
This adjustment is viewed as beneficial for the crypto industry, fostering innovation and encouraging wider engagement in digital asset markets.
SEC Commissioner Hester Peirce and Senator Cynthia Lummis commended the repeal for its favorable effects on the banking sector.

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