The U.S. Securities and Exchange Commission officially revoked its controversial crypto accounting guidance, which forced financial institutions to account for crypto assets as liabilities on their balance sheets.
In an open statement on Thursday, 23 January 2025, the regulator referred to the passing of Staff Accounting Bulletin 122, which essentially overrides the earlier guidance under SAB 121. It’s just about thrown a wedge into the already split argument for the previous directive.
“This staff accounting bulletin (‘SAB’) rescinds the interpretive guidance in Section FF of Topic 5 in the Staff Accounting Bulletin Series entitled Accounting for Obligations to Safeguard Crypto-Assets an Entity Holds for its Platform Users (‘Topic 5.FF’),” said SAB 122.
The SEC added, however, that entities do not have to stop disclosing the obligations and risks of safeguarding crypto assets.
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Change in SEC Leadership Allows Favourable Tailwind in the US Crypto Space
This has been welcomed as a win for the cryptocurrency space. The tone under acting Chair Commissioner Mark Uyeda appears to have changed from what it was during that of his predecessor, former Chair Gary Gensler.
Over the prior years, the crypto space saw heavy-handed regulatory campaigns under Gensler’s administration. Early decisions by Uyeda show a promising change in the direction of the SEC regarding regulating digital currencies.
The 2022 guidance, SAB 121, would have forced banks to hold customer crypto assets as liabilities, which lawmakers on both sides of the aisle and the crypto sector lobbied hard against. After much wrangling, lawmakers voted along party lines to invalidate it.
However, efforts to block SAB 121 initially proved futile after former President Joe Biden vetoed the bipartisan ruling. At the time, Biden claimed the guidance was necessary in accounting terms – much to the ire of many within the crypto sphere.
That was reversed under the Donald Trump presidency, and the administration changed. Trump lost no time getting onto the crypto podium, acting on campaign promises to help the industry. Major crypto advocates have praised his administration for swift action on issues such as de-banking and in making the United States a frontrunner in digital asset innovation.
During his first week, Trump signed an executive order to create the Presidential Working Group on Digital Assets Markets. The group aims to develop a comprehensive regulatory scheme for digital assets and a study for creating a national digital asset reserve—which most believe is the prerequisite to the Bitcoin Strategic Reserve.
Acting Chairman Mark T. Uyeda launched a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets. Commissioner Hester Peirce will lead the task force. For more: https://t.co/cImOILB7HG
— U.S. Securities and Exchange Commission (@SECGov) January 22, 2025
The pullback of SAB 121 and the SEC’s retreat are signals for more friendly cryptocurrency markets under the new administration.
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What Does the Future of Digital Assets Look Like Under New Administration?
A lot has happened in the first few days of the President-elect’s taking office. President Trump recently signed an executive order titled “Strengthening American Leadership in Digital Financial Technology.” For bitcoin enthusiasts, this might just be the Overton window they have been waiting for. The order emphasizes support and responsible growth of digital assets.
It also recognizes citizens’ rights to access and freely use open public blockchain networks without any interference. The order mentions permissions for users to develop software, maintain self-custody, and participate in mining.
The new executive order also explicitly bans the creation, use, and promotion of CBDCs. This move could be seen as the new administration’s leaning towards an open blockchain network.
Any ongoing or planned CBDC-related projects within the federal agencies have been halted. The reason stated was concerns regarding individual privacy, national sovereignty, and system stability.
This executive order signals a fork in the road for many in the crypto space. The Trump administration has firmly placed Bitcoin at the heart of the American economy.
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The post US Crypto Space Relieved as SEC Rolls Back Sab 121 appeared first on 99Bitcoins.
