SEC Rescinds Crypto Rule Blocking Banks from Custody Services

The repeal of SAB 121 marks a significant shift in U.S. crypto regulation, enabling banks to offer digital asset custody under broader accounting standards.

The SEC has withdrawn Staff Accounting Bulletin 121 (SAB 121), which required banks to account for customers' crypto assets as liabilities, deterring their participation in digital asset custody.
The decision follows the resignation of former SEC Chair Gary Gensler, who supported the rule, and the establishment of a new crypto task force led by Commissioner Hester Peirce.
Banks and crypto advocates have welcomed the move, citing reduced costs and regulatory clarity as key benefits for expanding digital asset services.
The Trump administration's pro-crypto stance, including an executive order promoting fair access to banking for crypto companies, underscores the shift in regulatory priorities.
The repeal aligns with bipartisan Congressional efforts to overturn SAB 121, which had been vetoed by former President Biden in 2024.