Controversial crypto accounting rule SAB 121 finally cancelled by SEC

[TomPluz]

The US Securities and Exchange Commission has revoked a rule that discouraged financial firms from holding crypto, by requiring them to record digital assets as liabilities on their balance sheets.

A new Staff Accounting Bulletin on Jan. 23 said it “rescinds the interpretive guidance” of SAB 121, an agency rule published in March 2022 that the crypto industry has long sought to cancel.

“Bye, bye SAB 121!” SEC Commissioner Hester Peirce, the agency’s crypto task force lead, wrote in a Jan. 23 X post. “It’s not been fun.”

And this is good news for all firms that are or actually planning to hold cryptocurrencies in their balance sheets and can pave the way for banks to be custody of cryptocurrencies as well.

It is must be remembered that there was the bipartisan support to repeal the said rule but it was then vetoed by no less than ex-POTUS Biden and then was not able to be overturned by the House due to  lack of votes.

This is a good news coming from the new SEC and hopefully we will hear more impactful decisions once the new chairman would start his time.

[MrSpasybo]

The US Securities and Exchange Commission has revoked a rule that discouraged financial firms from holding crypto, by requiring them to record digital assets as liabilities on their balance sheets.

A new Staff Accounting Bulletin on Jan. 23 said it “rescinds the interpretive guidance” of SAB 121, an agency rule published in March 2022 that the crypto industry has long sought to cancel.

“Bye, bye SAB 121!” SEC Commissioner Hester Peirce, the agency’s crypto task force lead, wrote in a Jan. 23 X post. “It’s not been fun.”

And this is good news for all firms that are or actually planning to hold cryptocurrencies in their balance sheets and can pave the way for banks to be custody of cryptocurrencies as well.

It is must be remembered that there was the bipartisan support to repeal the said rule but it was then vetoed by no less than ex-POTUS Biden and then was not able to be overturned by the House due to  lack of votes.

This is a good news coming from the new SEC and hopefully we will hear more impactful decisions once the new chairman would start his time.

This is an opportunity for traditional banks to support the crypto market without being hindered by unreasonable and unfair regulations. This will allow many crypto companies to use banking services to pay employees or make payments when necessary, and we will see strong growth of the crypto market in the US.

I just don't understand why SAB 121 was proposed and implemented even though it was so unreasonable. Conspiracy theories suggest that it was a plan to delay this market, giving traditional companies enough time to join and catch up with the crypto market. Anyway, I hope we will have a strong bullrun in Q1 & Q2 this year ^^

[philipma1957]

This is the most positive executive order for crypto by trumpeter so far.

I see a big uptick this year hodl and stack as much as you can.

[Faisal2202]

I am not aware of this SAB 121 before, so what is bad in counting crypto assets as liabilities on balance sheet for companies, I might be missing something here so help me to understand what is really bad in that and how this recession is a good thing for crypto.

I mean, a company that has crypto as a liability is not that bad because crypto is highly volatile and can be very risky. to be on the safer side, the people or investors going to buy the shares of that company must know that they have some highly volatile assets. So, what's changed is if those are not tagged as highly volatile, this does not change the nature of crypto (volatility).

[yhiaali3]

This is really good and I hope we will soon hear more good news and open regulations to make things easier for the entire crypto industry.

I just remembered the former SEC Chairman Gary Gensler, I used to cringe whenever I saw his face or heard him tweet on X or make a statement somewhere, he always brought havoc and destruction to the industry, but now with the new SEC Commissioner things are starting to change and we are starting to hear good news.

[Zed0X]

I am not aware of this SAB 121 before, so what is bad in counting crypto assets as liabilities on balance sheet for companies, I might be missing something here so help me to understand what is really bad in that and how this recession is a good thing for crypto.

I mean, a company that has crypto as a liability is not that bad because crypto is highly volatile and can be very risky. to be on the safer side, the people or investors going to buy the shares of that company must know that they have some highly volatile assets. So, what's changed is if those are not tagged as highly volatile, this does not change the nature of crypto (volatility).

It's not even about the volatility. The main point here is that companies in custody of crypto assets don't want to be held liable to the real owner. Although they are still supposed to return them if the depositor asks for it, they don't want it to appear as if they borrowed it. It also affects their reports and they don't want that.