SEC removes the controversial cryptographic tax accounting bulletin

The Securities and Exchange Commission of the United States published on Thursday a new staff accounting bulletin withdrawing its controversial Sab 121.

SAB 121 ordered banks and other public companies to mark the cryptographic assets of all customers in their own assessments. SAB 122 “Cancels interpretative guidelines” and orders companies to use the rules of the Financial Accounting Standards Board or the provisions of international accounting standards.

“The staff reminds the entities that they must continue to take into account the existing requirements for the provision of information allowing investors to understand the obligation of an entity to protect crypto-actives held on behalf of others “Indicates the opinion of Thursday.

The directive she cancels, Sab 121, was supported by the former president of the SEC, Gary Gensler, who said that she would protect investors in the event of bankruptcy.

“What we have noticed before the courts of bankruptcies, repeatedly, is that indeed, the courts of bankruptcies said that cryptographic assets are not far from bankruptcy,” he told Reuters in 2023.

However, Sab 121 angered a large part of the cryptography industry and has been the subject of a resolution of the Congressal Review Act adopted by the Chamber and the Senate, although former President Joe Biden opposed his veto to this resolution.

The SEC Commissioner, Hester Peirce, who was recently appointed to the head of a new working group on cryptography, has long opposed the directives, affirming after her adoption in 2022 that the directives did not take into account the fact that the SEC had not issued any directive on the way in which the laws on securities applied to cryptography. And that an accounting bulletin may not be the right vehicle for the type of directives contained in the SAB 121.

Peirce announced the withdrawal on Thursday.

Update (January 24, 2024, 00:00 UTC): Add additional details.