Key Takeaways
- BNY Mellon is moving closer to offering custody services for Bitcoin ETFs after receiving regulatory approval from the SEC.
- The SEC's Office of the Chief Accountant determined that BNY Mellon does not need to comply with controversial SAB 121 accounting guidelines for Bitcoin custody.
- SAB 121 has faced significant opposition from the financial sector, including from banks and lawmakers, due to its impact on how Bitcoin holdings are reported.
BNY Mellon Moves Toward Bitcoin Custody for ETFs
The Bank of New York Mellon is preparing to offer custody services for Bitcoin exchange-traded funds (ETFs).
This move follows a recent decision by the U.S. Securities and Exchange Commission (SEC) to ease strict Bitcoin accounting rules for BNY.
BNY Mellon is engaging with multiple regulators to ensure it can scale its Bitcoin custody services for exchange-traded products (ETPs).
SEC Softens SAB 121 Requirements
The SEC's Office of the Chief Accountant determined that BNY Mellon does not need to comply with the agency’s Staff Accounting Bulletin (SAB) 121.
SAB 121 required companies to treat client-held Bitcoin as liabilities on their balance sheets, which created challenges for the industry.
Other financial institutions may also benefit from the SEC's decision if they can prove they offer similar protections in their custody arrangements.
Ongoing Controversy Surrounding SAB 121
SAB 121, introduced in 2022, has been a significant point of contention within the U.S. Bitcoin industry.
Politicians and financial institutions, including the Bank Policy Institute and American Bankers Association, have pushed back against the rule.
The SEC maintained the guidance despite opposition, and President Biden vetoed legislation to overturn it in June 2023.
