SEC Staff Accounting Bulletin No. 121

SEC Staff Accounting Bulletin No. 121 was a United States Securities and Exchange Commission staff accounting bulletin addressing crypto-asset safeguarding obligations for SEC reporting and filing entities. SAB 121 was published in the Federal Register with an effective date of April 11, 2022, and, as of June 4, 2026, it should be treated as rescinded rather than active guidance because SEC Staff Accounting Bulletin No. 122 rescinded Topic 5.FF effective January 30, 2025.

The profile is best read as an accounting and disclosure reference for digital-asset custody arrangements, not as a crypto statute or a Commission rule. SAB 121 stated that staff accounting bulletins are not Commission rules or Commission interpretations and do not bear official Commission approval; they represent staff interpretations and practices followed by the Division of Corporation Finance and the Office of the Chief Accountant.

Key provisions of SEC Staff Accounting Bulletin No. 121

Crypto-asset safeguarding scope

SAB 121 added Section FF to Topic 5 of the Staff Accounting Bulletin Series for entities with obligations to safeguard crypto-assets held for platform users. The bulletin applied to Exchange Act reporting companies, certain Securities Act or Exchange Act registration statements, Regulation A filers, and private operating companies whose financial statements appeared in certain shell-company or SPAC business-combination filings.

Balance-sheet liability and corresponding asset

The central accounting view was that, while an entity remained responsible for safeguarding crypto-assets held for platform users, including maintaining cryptographic key information, the staff believed the entity should present a safeguarding liability on its balance sheet. SAB 121 also stated that the liability should be measured at fair value and that a corresponding asset should be recognized at the same time and measured at the same fair-value amount.

Disclosure expectations

SAB 121 also described disclosure expectations. The staff expected notes to the financial statements to address the nature and amount of crypto-assets held for platform users, significant crypto-asset concentrations, fair-value measurement disclosures, accounting for the related liability and asset, who held cryptographic key information, and who had obligations to secure the assets. The bulletin also discussed risk-factor, business-description, and MD&A disclosure considerations where material.

Jurisdictional impact in the United States

The bulletin affected SEC-facing financial reporting rather than state custody law, banking capital rules, or customer-property treatment. It expressly stated that it did not address other questions raised by crypto-asset safeguarding activity, including registration or other federal, state, or foreign legal issues. For CryptoSlate readers, the practical relevance was its effect on how public companies and other SEC filers presented crypto custody arrangements in financial statements.

Status and timeline

SAB 121 became a major U.S. crypto accounting policy issue after the Government Accountability Office concluded on October 31, 2023 that the bulletin was a rule for Congressional Review Act purposes and should have been submitted to Congress. Congress later passed H.J.Res.109, a resolution of disapproval for SAB 121, but the resolution was vetoed and failed to pass over the veto in the House on July 11, 2024.

The operative status changed in 2025. SAB 122 rescinded Topic 5.FF and directed entities with crypto-asset safeguarding obligations to evaluate loss-related liabilities under existing contingency accounting standards, including FASB ASC Subtopic 450-20 or IAS 37, as applicable. SAB 122 also stated that entities should continue to consider existing disclosure requirements that help investors understand crypto-asset safeguarding obligations. No future SAB 121 deadline was identified as of June 4, 2026.