From SAB 121 to SAB 122: How SEC Guidance and OCC Letters Cleared Wall Street Custody for US Crypto Assets
Regulatory status for this October 15, 2026 analysis: The SEC’s controversial Staff Accounting Bulletin No. 121 (SAB 121), which required entities safeguarding crypto-assets for platform users to recognize an on-balance-sheet liability and matching asset at fair value, was formally rescinded by the SEC’s Office of the Chief Accountant on January 23, 2025 through Staff Accounting Bulletin No. 122 (SAB 122). Combined with the Office of the Comptroller of the Currency (OCC) Interpretive Letter 1183, prudentially regulated US financial institutions have transitioned back to standard off-balance-sheet fiduciary custody accounting. This analysis outlines the legal mechanics, capital relief, institutional ETF diversification, and ongoing tax implications for market participants. ...