Bank of New York Mellon, the largest U.S. custodian bank, scored an exemption from a controversial SEC rule that may enable Bitcoin custody.
Institutional custody of Bitcoin (BTC) and cryptocurrencies in the U.S. took a step forward as BNY Mellon was reportedly granted permission to operate outside the Staff Accounting Bulletin No. 121, also known simply as SAB 121.
The Securities and Exchange Commission’s SAB 121 advised entities holding customer crypto to report such holdings as corporate liabilities. SAB 121 also required financial service providers to disclose the type of crypto safeguarded and its accompanying valuation.
Lawmakers in the U.S. House of Representatives initially scrapped the SEC’s policy, but the White House under current President Joe Biden vetoed the bill into law.
BNY Mellon securing an exemption from SAB 121 requirements could pave the way for major U.S. banks to custody customers’ Bitcoin and cryptocurrencies. Michael Saylor, founder of MicroStrategy, the world’s largest corporate BTC holder, said that one or more mainstream banks may soon receive the green light to custody crypto.
Such a development could signal a softening of the U.S. federal crypto crackdown. For years, industry proponents have criticized U.S. authorities for the so-called “Operation Choke Point 2.0.”, a multi-regulatory agenda to banish f crypto from the traditional financial system.
BNY Mellon and other banks being able to custody Bitcoin may also accelerate BTC’s spot price. Saylor has previously suggested that bank custody of BTC was the final of three catalysts needed to propel Bitcoin above $5 million per coin.
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