The U.S. Securities and Exchange Commission (SEC) has rescinded accounting guidance that the cryptocurrency industry has long opposed. This move, announced Thursday, marks an early shift away from the policies of the previous administration. The decision is considered a victory for the crypto sector.
In a notice published on its website, the SEC stated that it had revoked the 2022 guidance known as Staff Accounting Bulletin 121. This guidance, which then-President Joe Biden blocked lawmakers from cancelling in May of last year, had been a point of contention.
The crypto industry and lawmakers who are friendly to crypto had strongly opposed the measure. The guidance required companies that hold digital assets on behalf of others to account for them as liabilities, which increased the cost of operations. Gary Gensler, the former SEC Chair who stepped down on Monday, had maintained that the guidance was necessary to protect investors, particularly in cases of bankruptcy.
The withdrawal of the guidance was welcomed by the banking industry. Paige Pidano Paridon, co-head of regulatory affairs at the Bank Policy Institute, stated, “Today’s decision restores banks’ ability to serve as a trusted and secure option for clients that choose to custody digital assets.”
The SEC also announced this week the creation of a crypto task force, which will be led by Republican Commissioner Hester Peirce. Peirce celebrated the decision on social media platform X, stating, “Bye bye, SAB 121! It’s not been fun!”
