SEC Allows Banks to Bypass SAB 121 Crypto Reporting Rules with Risk Offsets

Jul 12, 2024, 02:32 AM

The U.S. Securities and Exchange Commission (SEC) has granted several large banks and brokerages the ability to bypass strict balance sheet reporting requirements for cryptocurrency holdings. This decision allows these financial institutions to exclude their customers' crypto assets from their balance sheets, provided they implement measures to mitigate associated risks and ensure asset protection during bankruptcies. The SEC's move is seen as a response to ongoing industry pressure and aims to address challenges posed by the controversial SAB 121, which has been a significant regulatory hurdle since its introduction in 2022. Additionally, the SEC has officially ended its investigation into Paxos over the BUSD stablecoin, ruling it not a security.