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This is a segment from the Forward Guidance newsletter. To read full editions, <\/em>subscribe<\/em><\/a>.<\/em><\/p>\n SEC Commissioner Hester Peirce \u2014 two days after being named leader of a new crypto task force<\/a> \u2014 revealed SAB 121 would be no more.<\/p>\n Bye, bye SAB 121! It’s not been fun: https:\/\/t.co\/cIwUc0isUE<\/a> | Staff Accounting Bulletin No. 122<\/p>\n \u2014 Hester Peirce (@HesterPeirce) January 23, 2025<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n Some context: A Staff Accounting Bulletin, or SAB, represents interpretations and policies followed by SEC divisions in administering federal securities laws-related disclosure requirements<\/a>.<\/p>\n The SEC published SAB 121 in March 2022. It notably said that an entity \u201cshould present a liability on its balance sheet to reflect its obligation to safeguard the crypto-assets held for its platform users.\u201d<\/p>\n Why does the crypto industry care so much<\/a> about the agency rescinding<\/a> this? <\/p>\n Cantor Fitzgerald Howard Lutnick explained the issue pretty well in a video<\/a> he posted to X in September \u2014 a couple months before Trump nominated him<\/a> to lead the Commerce department.<\/p>\n There\u2019s a misunderstanding that TradFi players don\u2019t want to transact in bitcoin, Lutnick claimed<\/a>. He added that for banks to custody a client\u2019s bitcoin, \u201cthey would have to set aside their own money equal to that amount in sort of like a jail.\u201d<\/p>\n Indeed, financial organizations told<\/a> SEC Chair Gary Gensler that the bulletin \u201chas curbed the ability of the associations\u2019 members to develop and bring to market at scale certain digital asset products and services.\u201d<\/p>\n The upshot? As VanEck research execs wrote<\/a> in a December post detailing 2025 crypto predictions, this repeal \u201cwill pave the way for banks and brokers to custody spot crypto, further integrating digital assets into traditional financial infrastructure.\u201d<\/p>\n Benchmark analyst Mark Palmer argued in a Friday note that this SAB 121 rescission \u201crepresents an even more meaningful game-changer for bitcoin and the broader crypto ecosystem\u201d than a potential strategic bitcoin reserve does.<\/p>\n While SAB 121 was published in 2022, it wasn\u2019t until last year that Congress sent a bill<\/a> overturning the guidance to Joe Biden\u2019s desk. He vetoed it<\/a>.<\/p>\n Ava Labs deputy general counsel Wee Ming Choon told me last month that rescinding SAB 121 would be an act of \u201cgood will\u201d that a new agency administration could take quickly. It seems that take was correct. <\/p>\n Rest up this weekend, as another wave of developments is sure to come.<\/p>\n Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter<\/a>.<\/strong><\/p>\n Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter<\/a>.<\/strong><\/p>\n Get alpha directly in your inbox with the 0xResearch newsletter<\/a> \u2014 market highlights, charts, degen trade ideas, governance updates, and more.<\/strong><\/p>\n
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