Crypto Regulation: SEC Rescinds Accounting Rule

SEC Rescinds Crypto Accounting Rule, Shifts Regulatory Approach

• The SEC rescinded Staff Accounting Bulletin No. 121, initially introduced in March 2022.
• SAB 121 required companies to record liabilities and assets for crypto held on behalf of users.
• Under the new framework, broader accounting standards like U.S. GAAP and IFRS will be used.
• The changes apply retroactively for fiscal years starting after December 15, 2024, with early adoption allowed.
• Hester Peirce leads the SEC’s new crypto task force, focusing on collaboration over enforcement.

The SEC’s decision to rescind SAB No. 121 allows companies to use broader accounting standards for crypto-assets, marking a regulatory shift under Commissioner Hester Peirce’s leadership. The changes are effective for fiscal years beginning after December 15, 2024.