The U.S. Securities and Exchange Commission (SEC) has published a new Staff Accounting Bulletin which withdraws its previously controversial SAB 121.

SAB 121 mandated banks and other public companies to report customers’ crypto assets on their own balance sheets. The newly introduced SAB 122 states it “rescinds the interpretive guidance” and now advises firms to adhere to Financial Accounting Standards Board rules or International Accounting Standard provisions.

“The staff reminds entities that they should continue to comply with existing disclosure requirements that inform investors about an entity’s obligations to protect crypto-assets held for others,” noted the SEC in their announcement.

Former SEC Chair Gary Gensler, an advocate of SAB 121, previously argued it aimed to safeguard investors during bankruptcies, citing that many bankruptcy courts ruled crypto assets are not protected in such scenarios.

However, the guidance drew significant backlash from the crypto sector and led to a Congressional Review Act resolution approved by both the House and Senate—albeit vetoed by Joe Biden.

Hester Peirce, SEC Commissioner and newly appointed head of a crypto task force, has long criticized the guidance. She stated it lacked any SEC guidance on how securities laws pertain to cryptocurrency, and declared the withdrawal on Thursday.

Hester Peirce’s tweet:

“Bye, bye SAB 121! It hasn’t been fun.” Link | Staff Accounting Bulletin No. 122

Update (Jan. 24, 2024, 00:00 UTC): Additional details included.