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ARTICLE · 06 FEBRUARY 2025

With SAB 121 Rescinded, Can Banks Now Hold Crypto?

Duane Morris LLP
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For almost three years, Staff Accounting Bulletin 121 of the Securities and Exchange Commission effectively prevented banks from holding crypto...

United StatesTechnology
Roger S. Chari
Roger S. Chari
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For almost three years, Staff Accounting Bulletin 121 of the Securities and Exchange Commission effectively prevented banks from holding crypto on behalf of customers by indirectly requiring them to maintain a capital loss reserve equal to the full value of the crypto even though the bank does not own the crypto. The announcement by SEC Acting Chairman Mark T. Uyeda on January 21, 2025 of a new crypto task force to be led by pro-crypto Commissioner Hester Peirce foreshadowed a change in the Commission's attitude towards crypto. Two days later, the SEC issued Staff Accounting Bulletin 122 rescinding SAB 121 effective as of January 30, 2025. If the dry and formal language of SAB 122 left any doubt as to the attitude shift, Commissioner Peirce's post on X later that day, "Bye, bye SAB 121! It's not been fun" spoke volumes.

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