SEC sticks to position on cryptocurrency custody regulations for financial institutions: ”Policy remains unchanged”

The U.S. Securities and Exchange Commission (SEC) has made it clear that it remains committed to rules restricting banks from offering cryptocurrency custody services.
SEC Chief Accountant Paul Munter discussed the SEC's regulatory position on the accounting for cryptocurrency assets at the banking conference today and announced the SEC Staff Accounting Standards Board's report.
The SEC staff's view of SAB 121 has not changed. Absent certain mitigating facts or circumstances, the staff believes that
"We believe that institutions should be on record as accountable for the crypto assets they hold for others," said Nate G.
Geraci said, "The SEC appears to be holding firm on SAB 121. They want regulated financial institutions to be authorized to hold cryptocurrencies."
"It seems that they are not doing this," X (formerly Twitter) said in a post. The SEC will implement SAB 121 in March 2022, providing accounting guidelines to institutions that intend to hold crypto assets.
The rule was politically controversial and effectively blocked banks and regulated financial institutions from storing crypto assets on behalf of their customers.
The SEC believes that institutions with such safeguards should include liability for digital assets on their balance sheets.
Munter said the SEC will consider various accounting scenarios related to blockchain and crypto assets, and all cases will be assessed against the SAB.
They acknowledged that it does not comply with the 121 guidelines.
Munter said, “If a bank holding company stores cryptocurrency through a resolution protection device,
"They may not need to record the liability on their balance sheets. Also, intermediate dealers that intermediate cryptocurrency transactions but do not control the cryptographic keys may not need to record a liability."
He added.