{"id":497,"date":"2025-01-31T15:17:10","date_gmt":"2025-01-31T19:17:10","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/bankinglaw\/?p=497"},"modified":"2025-01-31T15:17:11","modified_gmt":"2025-01-31T19:17:11","slug":"with-sab-121-rescinded-can-banks-now-hold-crypto","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/bankinglaw\/2025\/01\/31\/with-sab-121-rescinded-can-banks-now-hold-crypto\/","title":{"rendered":"With SAB 121 Rescinded, Can Banks Now Hold Crypto?"},"content":{"rendered":"\n

For almost three years, Staff Accounting Bulletin 121<\/a> 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<\/a> to be led by pro-crypto Commissioner Hester Peirce foreshadowed a change in the Commission\u2019s attitude towards crypto. Two days later, the SEC issued Staff Accounting Bulletin 122<\/a> 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\u2019s post<\/a> on X later that day, \u201cBye, bye SAB 121! It\u2019s not been fun\u201d spoke volumes.<\/p>\n\n\n\n

With this substantial financial impediment on banks lifted, it would be easy to assume that banks are now free to offer crypto custody and other digital asset services to customers. However, although the SEC took the lead over the last several years, there are other regulators that have a more direct impact on the banking system- the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency. In large part, these institutions have also discouraged banks from engaging in crypto activities, but they have been able to do so more quietly given the SEC\u2019s more aggressive stance. On January 29, 2025, Federal Reserve Chair Jerome Powell offered some hope, stating at the Federal Open Markets Committee<\/a> meeting that \u201cwe\u2019re not against innovation,\u201d and that banks are \u201cperfectly able to serve crypto customers.\u201d<\/p>\n\n\n\n

In our recent Alert<\/a>, we discuss some of the implications of the rescission of SAB 121 and the bank regulatory challenges to come.<\/p>\n","protected":false},"excerpt":{"rendered":"

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 … <\/p>\n

Continue reading “With SAB 121 Rescinded, Can Banks Now Hold Crypto?”<\/span><\/a><\/p>\n","protected":false},"author":414,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[505,481,482,248,420,506,486,421,480,492,485,484,483,488,507,487,495,496,493,424],"ppma_author":[346],"class_list":["post-497","post","type-post","status-publish","format-standard","hentry","category-general","tag-bank-regulation","tag-bitcoin","tag-btc","tag-chari","tag-crypto","tag-crypto-custody","tag-cryptocurrencies","tag-cryptocurrency","tag-digital-asset","tag-emerging-tech","tag-eth","tag-ether","tag-etherium","tag-nft","tag-non-fungible-token-2","tag-non-fungible-token","tag-sab-121","tag-staff-accounting-bulletin-121","tag-virtual-currencies","tag-virtual-currency"],"authors":[{"term_id":346,"user_id":414,"is_guest":0,"slug":"rschari","display_name":"Roger S. Chari","avatar_url":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-content\/uploads\/sites\/14\/2020\/02\/chariroger-125x150.jpg","0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/posts\/497","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/users\/414"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/comments?post=497"}],"version-history":[{"count":0,"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/posts\/497\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/media?parent=497"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/categories?post=497"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/tags?post=497"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/blogs.duanemorris.com\/bankinglaw\/wp-json\/wp\/v2\/ppma_author?post=497"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}