Bank of New York Wins SEC Approval to Hold Bitcoin, Crypto Surges

• BNY has received a variance from following the SEC’s SAB 121 accounting guidelines.
• The variance would allow BNY to custody Bitcoin as part of its business operations.
• BNY’s recent achievement is a bullish development for the crypto industry.

The Bank of New York (BNY) has received a variance by following the SEC’s Staff Accounting Bulletin No. 121 (SAB 121) guidelines, according to the host of the Thinking Crypto podcast. This variance will allow BNY to hold Bitcoin as part of its business operations.

The crypto analyst mentioned that Chris Land, general counsel for U.S. Senator Cynthia Lummis, testified last Monday that the SEC and possibly other regulators have given BNY the go-ahead to offer institutional custody for digital assets.

SAB 121: A Closer Look

SAB 121 is a rule that places the responsibility on crypto custody firms to safeguard the crypto assets held for their platform users. Enacted in 2022, the rule requires these firms to show a liability on their balance sheet to reflect this obligation.

Additionally, SAB 121 mandates that crypto custody firms recognize an asset alongside the safeguarding liability, measured at initial recognition and each reporting date at the fair value of the crypto assets held for its platform users. Since its introduction, SAB 121 has raised concerns about the scope and application of the SEC’s actions, prompting some Members of Congress to express interest in its disapproval.

Read also : SEC Loosens SAB 121 Rules, Paving the Way for Banks to Enter Crypto Custody Market    

The crypto analyst, on his part, views the variance received by BNY as a bullish development for the crypto industry. He also sees it as a win against SEC Chair Gary Gensler, who many crypto users believe is driving the push for implementing SAB 121.

The  crypto analyst also confirmed through his post the post made by MicroStrategy CEO Michael Saylor highlighting the rumors that had been circulating a while that one or more top U.S. banks would be able to custody Bitcoin. Saylor made the post several hours before the crypto analyst’s confirmation.

The BNY crypto custody rumor arrived alongside surging Bitcoin prices, as the flagship crypto rallied almost all week, moving from $57,627 to $64,121 in a move worth over 11% of its value, according to data from TradingView.