The Securities and Exchange Commission (SEC) has taken a significant step by rescinding SAB121, a rule that previously required companies to list customer crypto assets on their financial statements. Under the new guidance, companies now only need to report risks if complications arise. This change could potentially streamline crypto service offerings for banks and financial institutions.
The legal battle between Ripple Labs and the SEC continues to evolve, with recent developments suggesting the case might extend for another ten months. The SEC has filed an appeal against a preliminary ruling that determined XRP sales do not constitute securities, creating uncertainty about the potential timeline for resolution.
A notable development involves a lead plaintiff filing an appeal regarding costs taxed against Ripple, while Ripple itself seeks to conclude the lawsuit, arguing that the claims are unwarranted. Legal experts speculate that the SEC might not pursue appeals aggressively under new leadership, potentially paving the way for a resolution by April or May 2025.
The SEC just removed a rule that made companies list customer crypto on their financial statements. Now, they only need to report risks if something goes wrong. This could make it easier for banks and companies to offer crypto services. https://t.co/b7W4JluszW
— Ali (@ali_charts) January 23, 2025
On January 22, Better Markets, a nonprofit focused on financial market integrity, submitted an amicus curiae brief supporting the SEC’s appeal. The brief criticizes the lower court’s interpretation of securities regulations concerning XRP sales, arguing that excluding secondary market transactions from regulation could undermine investor protection.
The leadership transition at the SEC adds another layer of complexity. Mark Uyeda took over as acting chair following Gary Gensler’s resignation on January 20, 2025. Uyeda’s perceived pro-crypto stance could signal a potential shift in the SEC’s approach to cryptocurrency regulation, which might significantly influence the Ripple case.
Read also: Is XRP Price Gearing Up for a Move to $4? Elite Analyst Weighs In
Implications of SAB121 Rescission
The removal of SAB121 could have positive implications for XRP and the broader crypto ecosystem. By reducing bureaucratic barriers, the SEC’s decision may create a more favorable environment for financial institutions to explore and integrate cryptocurrency services. This regulatory flexibility could potentially provide Ripple with a more supportive context for its ongoing legal proceedings.
While the XRP vs SEC case remains complex, these recent developments suggest a potential softening of regulatory stance towards cryptocurrency businesses.
Follow us on X (Twitter), CoinMarketCap and Binance Square for more daily crypto updates.
Get all our future calls by joining our FREE Telegram group.
We recommend eToro
Wide range of assets: cryptocurrencies alongside other investment products such as stocks and ETFs.
Copy trading: allows users to copy the trades of leading traders, for free.
User-friendly: eToro’s web-based platform and mobile app are user-friendly and easy to navigate.
