The US Securities and Exchange Commission (SEC) has officially withdrawn Staff Accounting Bulletin No. 121 (SAB 121), a crypto accounting rule introduced in 2022, just days after SEC Chair Gary Gensler stepped down.

The U.S. Securities and Exchange Commission has repealed Staff Accounting Bulletin ("SAB") No. 121, which required banks and other publicly-traded companies to account for customers' crypto assets on their balance sheets,

SEC revises crypto custody accounting policy with SAB 122, offering banks flexibility in reporting liabilities for safeguarding assets.

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.”

The SEC has replaced its strict crypto custody accounting rule SAB 121 with more flexible guidance under SAB 122, allowing banks to use standard accounting principles for digital assets and potentially expanding their ability to offer crypto custody services.

With little fanfare, on January 23, 2025, the US Securities and Exchange Commission (SEC) withdrew controversial Staff Accounting Bulletin 121 regarding custody of digital assets.