“Hello, Hello SAB 121! It wasn’t fun. ” It is a post posted by SEC Commissioner Hester Pierce after the US regulatory authorities withdrew the 2022 accounting guidelines, which required a company to report their cryptocurrency assets to the loan.
The cryptocurrency industry sincerely welcomed this movement. Many cryptocurrency lovers have publicly expressed their happiness through social media. Some people think that this is an important point in the journey for the success of the cryptocurrency sector. It’s time to dive deeper. Are you ready?
What is SAB 121 and why is it controversial?
SAB 121 was introduced in 2022. The goal was to solve the risks related to the customer’s cryptocurrency assets. Through this, the company had to list the customer’s cryptocurrency assets in the balance sheet, so investors could continue to obtain information on potential risks such as theft or misuse of cryptocurrency assets. However, this influenced the balance sheet and a serious operation problem for the company.
How did this rule affect banks and cryptocurrency companies?
The bank faced strict capital reserve requirements due to the expansion of the balance sheet. Naturally, the bank’s ability to provide cryptocurrency storage services has been limited. Meanwhile, the expanded balance sheet caused serious operation problems for cryptocurrency companies such as Coinbase and Robinhood.
In 2024, the US Congress made a strong attempt to cancel the SAB 121 rules. Lawmakers called for withdrawal by voting against this regulation. At the time, however, the US president used to reject the National Assembly’s decision.
What do the SEC commissioner think about the SAB 121 backlash of SEC?
Recently appointed to lead the cryptocurrency task force team to create a clear cryptocurrency regulatory framework in the United States, Hester Peirce expressed satisfaction with the SEC’s decision to abolish the controversial SAB 121 guidelines. .
In conclusion, the abolition of SAB 121 means important progress in the cryptocurrency sector. The SEC has set up a way for better industrial growth by reducing regulatory burden on companies and banks. As Hester PEIERCE leads the way for a more clearer cryptocurrency regulation, the industry is expected to grow in more balanced and practical regulatory frameworks.