In a recent speech, Paul Munter, the Chief Accountant of the U.S. Securities and Exchange Commission (SEC), appeared to make concessions regarding the SEC's Staff Accounting Bulletin No. 121 (SAB-121), which limited banks from providing digital asset custody services for clients.

According to analysis by Galaxy Research Director, Chris Thorn, Munter outlined some exemption conditions allowing bank holding companies and introducing brokers to bypass SAB-121's custody regulations. Banks can avoid SAB-121's reporting requirements if they secure written permission from state regulators for “bankruptcy isolation” to custody client assets, specify standards in contracts, and conduct regular risk assessments.

Introducing brokers can also be exempt from SAB-121's requirements by meeting three conditions: they cannot hold client private keys, act as a third party in transactions, or be agents of the introducing broker. Finally, introducing brokers must obtain a legal opinion that they qualify as an introducing broker under the digital asset exemption.

Earlier reports indicated that on July 11th, the U.S. House of Representatives voted on whether to overturn President Joe Biden's veto of the resolution related to SAB 121. However, the vote failed, and the SEC's cryptocurrency accounting policies remain unchanged.