The U.S. SEC has announced Staff Accounting Bulletin (SAB) No. 122, replacing SAB 121 , which previously discouraged banks when it came to offering Bitcoin (BTC) custody services. This change allows banks and financial institutions to provide crypto services without facing significant regulatory challenges. U.S. Banks Can Custody Bitcoin Under SAB 121, companies holding crypto-assets for customers had to record both an asset and a liability on their balance sheets. SAB 122 allows companies to treat these assets as contingent liabilities, addressing potential losses through theft or fraud. SEC Commissioner Hester Peirce tweeted that she is happy to see the controversial SAB 121 go. The update removes the requirement for banks to list customer-held crypto, like Bitcoin, as liabilities, easing compliance and reducing financial burdens. ETF analyst James Seyffart also chimed in, saying it was the right decision and that it should have happened a long time ago. U.S. Crypto Regulations Evolving The new guidance enables more banks to offer Bitcoin custody services by only accounting for potential losses, allowing flexibility in safeguarding crypto for customers. Unsurprisingly, the crypto community is excited, as U.S. banks have long wanted to custody Bitcoin. This update follows the SEC recently creating a crypto task force led by Hester Peirce . Previously, while a resolution to repeal SAB 121 passed Congress in May 2024, President Biden vetoed it.
