SEC Commissioner Hester Peirce revealed during a recent hearing with the House Financial Services Committee that the agency had granted exemptions to certain entities to provide cryptocurrency custody services, bypassing the restrictions of SAB 121. SAB 121 requires companies holding digital assets for customers to report them as liabilities on their balance sheets, which has been criticized by the crypto industry for increasing costs and stifling innovation. Although a bill to overturn the rule was vetoed by President Biden, U.S. lawmakers continue to push for its rescission. SEC Chairman Gary Gensler defended SAB 121, stating it represents "good accounting," while Commissioner Hester Peirce agreed that the rule should be rescinded and a more inclusive process should be followed in determining appropriate accounting standards. Peirce also noted that SAB 121 has limited custodial services in the crypto industry, with Coinbase being the only custodian among ETF issuers in the U.S.



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