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The US Securities and Exchange Commission (SEC) has annulled the contentious Staff Accounting Bulletin – SAB 121, just days following Gensler’s departure.
The regulation faced significant backlash for requiring banks that hold cryptocurrency to classify them as liabilities on their balance sheets.
The new SAB issued on January 23 indicated that it “rescinds the interpretive guidance” of the SAB 121 regulation. The Commission clarified that entities should now assess any liabilities related to safeguarding risks under broader accounting principles.
“Entities should apply this change retroactively for annual periods commencing after December 15, 2024,” the SEC stated in its announcement.
Vanessa A. Countryman, Secretary of the SEC, confirmed that SAB 122 has officially replaced SAB 121 within the regulatory framework.
“Goodbye, SAB 121! It hasn’t been enjoyable: SEC,” Hester Peirce, a commissioner at the US SEC, posted on X.
Goodbye, SAB 121! It’s not been enjoyable: https://t.co/cIwUc0isUE | Staff Accounting Bulletin No. 122
— Hester Peirce (@HesterPeirce) January 23, 2025
Peirce previously referred to SAB 121 as a “pernicious weed,” criticizing Gensler’s approach to regulating the industry. During an April 2024 event, she emphasized that rules with such broad implications “should be established by the entire Commission” rather than by the staff reporting solely to the chairman.
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Wyoming Senator Cynthia Lummis described SAB 121 as “disastrous for the banking industry.” The Bulletin “merely hindered American innovation and growth of digital assets,” she stated on X.
“I’m delighted to see it repealed and to have the SEC return to its intended mission.”
SAB 121 was disastrous for the banking industry, and merely hindered American innovation and growth of digital assets. I’m DELIGHTED to see it repealed and to have the SEC return to its intended mission. https://t.co/KkWQmNDJ8I
— Senator Cynthia Lummis (@SenLummis) January 24, 2025
Then President Joe Biden Vetoed Lawmakers’ Vote to Rescind SAB 121
On May 16, 2024, the US Senate voted to repeal the accounting bulletin. However, former President Joe Biden vetoed the resolution a few weeks later, defending SAB 121 as a reflection of the “considered technical” judgment of SEC staff.
Recently, Circle CEO Jeremy Allaire criticized SAB 121, stating that the rule made it “punitive for banks and financial institutions and companies even to hold crypto assets on their balance sheet.”
He anticipated that the crypto executive order would closely monitor the repeal of the crypto accounting guidance. “I’m strongly in favor of repealing it and I’d hope that President Trump would take that action,” Allaire remarked during the Davos World Economic Forum.
The post SEC Commissioner Hester Peirce Says Goodbye to Controversial Crypto Accounting Guidance SAB 121 appeared first on Cryptonews.
