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ARTICLE · 31 JANUARY 2025

SEC Withdraws Staff Accounting Bulletin No. 121

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On January 23, 2025, the SEC issued Staff Accounting Bulletin (SAB) 122, formally withdrawing the controversial SAB 121.

United StatesAccounting and Audit
Braeden Anderson
Braeden Anderson

On January 23, 2025, the SEC issued Staff Accounting Bulletin (SAB) 122, formally withdrawing the controversial SAB 121. The previous guidance, introduced under the leadership of former SEC Chair Gary Gensler, required public companies, including banks, to record customers' cryptocurrency holdings on their own balance sheets. This requirement was intended to provide added investor protections during bankruptcies but faced criticism for its potentially burdensome implications for institutions handling digital assets.

SAB 122 replaces this guidance, instructing firms to follow established accounting standards from the Financial Accounting Standards Board (FASB) or the International Accounting Standards (IAS). In its announcement, the SEC emphasized that entities remain obligated to disclose information that allows investors to understand how crypto assets are safeguarded.

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