SEC paves way for Wall Street banks to hold crypto
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The Securities and Exchange Commission reversed a controversial accounting rule Thursday, which had helped deter banks from participating in crypto services.
Why it matters: The move to rescind the guidance, known as SAB 121, comes as Wall Street prepares to expand their digital asset businesses in light of a changing regulatory landscape under President Trump.
Catch up quick: The accounting rule, issued by the SEC in 2022, said that any bank that held digital assets on behalf of a customer, a service known as custody, should account for the assets as a liability on its own balance sheet.
- This made holding crypto costly for banks, especially those looking to custody large volumes of digital assets in order to provide other transactional crypto services for clients.
- Wall Street had opposed the rule, and a resolution to overturn it had actually passed both houses of Congress last year with bipartisan support, but was vetoed by President Biden.
What they're saying: "Bye, bye SAB 121! It's not been fun," SEC commissioner Hester Peirce wrote on X Thursday afternoon, citing the action that revoked it: SAB 122.
Zoom in: Peirce, known to the industry as "Crypto Mom," was tapped Tuesday to head a crypto task force at the SEC charged with putting the agency on what it called a "sensible regulatory path."
- The task force was announced by acting SEC chairman Mark Uyeda, just a day after Trump was sworn in and former SEC chair Gary Gensler stepped down.
- Veteran regulator Paul Atkins, also a favorite of the crypto community, has been nominated as the next chair and is awaiting Senate confirmation.
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