BNY Mellon Secures SEC Exemption for Crypto Custody Services

BNY Mellon Receives SEC Exemption for Cryptocurrency Custody Services

In a significant development for the cryptocurrency industry, BNY Mellon, the largest custodian bank in the United States, has been granted an exemption from the SEC's SAB 121 accounting standards. This was confirmed during a recent public testimony before the Wyoming Blockchain, Financial Technology, and Digital Innovation Technology Special Committee.

What is SAB 121?

SAB 121 is an accounting standard formulated by the SEC that outlines how companies should account for digital assets. Specifically, it addresses the issues surrounding the custody of cryptocurrencies and how they should be reported on financial statements. The exemption allows BNY Mellon to bypass these constraints, providing it with greater flexibility in its operations related to cryptocurrency.

Details from the Testimony

Chris Land, General Counsel to U.S. Senator Cynthia Lummis (R-WY), provided insights during the testimony, stating that regulators have cleared the path for BNY Mellon to expand its services in the cryptocurrency space. He mentioned, 'BNY Mellon is seeking deeper involvement in cryptocurrency custody services. They encountered some issues with SAB 121, and the SEC has evidently granted them some form of exemption to allow them to proceed.'

Impact on Institutional Cryptocurrency Custody

The exemption marks a turning point for institutional investors looking to enter the cryptocurrency market. BNY Mellon's move to engage more aggressively in this area reflects a growing acceptance of digital assets within traditional finance and paves the way for other financial institutions to consider similar ventures.

Conclusion

This exemption not only highlights BNY Mellon's commitment to expanding its suite of services but also signals a broader trend of regulatory adjustments to accommodate the growing demands of the cryptocurrency market. As more institutions take steps toward embracing digital assets, the financial landscape is likely to evolve rapidly.