US SEC Staff Accounting Bulletin No. 121

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.

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.

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.

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 SAB 122 rescinded Topic 5.FF and directed entities with crypto-asset safeguarding obligations to evaluate loss-related liabilities under existing contingency accounting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.