SAB 122 (after withdrawal of SAB 121) streamlines crypto custody operations and fosters greater trust in traditional financial firms offering cryptocurrency services.
The Staff Accounting Bulletin (SAB) 121 rule was introduced by the SEC in March 2022 as part of its efforts to regulate cryptocurrency custody.
It required financial institutions to list any crypto assets they held on behalf of customers as liabilities on their balance sheets. In essence, it handled these digital assets like conventional custodial assets, such as cash or securities.
