Good news for cryptos. The Securities and Exchange Commission (SEC) of the United States has just made an important gesture in favor of the cryptocurrency industry. The Commission has, in fact, announced the cancellation of the controversial rule SAB 121, which required financial companies holding cryptos on behalf of clients to record them as liabilities in their balance sheets. The move marks a victory for the industry, which saw the rule as a major barrier to institutional adoption of digital assets.
The SAB 121 rule: an obstacle for financial institutions
Published in March 2022, the SEC Rule SAB 121 required financial companies to consider cryptocurrencies held on behalf of clients as liabilities. In other words, these digital assets had to be recorded on the liabilities side of the company's balance sheetwhich complicated their accounting management and increased the necessary capital reserves. This measure was widely criticized by the industry, which saw it as unfair treatment compared to other types of financial assets.
Political figures like House Financial Services Committee Chairman French Hill also denounced the rule, pointing out that it was not consistent with standard financial services practices. In addition, it could have prevented American banks from maintaining financial products based on cryptocurrencies, thus limiting their ability to offer these services on a large scale.
A decision welcomed by the cryptocurrency industry
The rescission of SAB Rule 121 was enthusiastically received by cryptocurrency stakeholders. Hester Peirce, SEC commissioner and leader of the agency's crypto task force, said on X: “Bye, bye SAB 121!” It wasn't fun.”. His comment reflects the general relief to see the disappearance of a rule that many believed was holding back innovation and adoption of digital assets.
Senator Cynthia Lummis, known for her support of cryptocurrency, also applauded the move, saying SAB 121 was “disastrous for the banking industry” and that she “stifled American innovation”. Its removal is therefore seen as a positive step towards more favorable regulation of cryptocurrencies.
-A new lease of life under the Trump administration
The rescission of SAB 121 is one of the SEC's first significant actions under President Donald Trump, with Mark Uyeda serving as Acting Chairman. Although this rule initially received bipartisan support in Congress, it had been maintained under the Biden administration, despite criticism from the industry.
The move is part of a series of pro-crypto moves expected under the Trump administration, which has promised to create a more favorable regulatory framework for digital assets. With the rescission of SAB 121, the SEC therefore appears ready to deliver on these promises, paving the way for increased institutional adoption of cryptocurrencies.
The SEC's reversal of SAB Accounting Rule 121 represents a major victory for the cryptocurrency industry. By removing an accounting constraint that was holding back financial institutions, the SEC is sending a strong signal in favor of the adoption of digital assets. Under the Trump administration, this decision could mark the start of a new era for cryptocurrency in the United States, with regulations more tailored to the needs of the sector.
