Trump Signs Pro-Crypto Order; SEC Repeals SAB 121 and Forms Crypto Task Force

The digital asset landscape in the United States has seen sweeping developments last week, with the new Trump administration issuing a landmark executive order (EO), the U.S. Securities and Exchange Commission (SEC) repealing controversial accounting guidance for digital assets and the creation of a pro-innovation SEC crypto task force. This isn’t an anodyne or piecemeal regulatory paper—it’s a strategic move to (purportedly) “protect individual freedoms, promote financial sovereignty, and preserve U.S. dominance in the global digital economy.”

Executive Order: “Strengthening American Leadership in Digital Financial Technology”

On January 23, 2025, President Trump signed an EO titled “Strengthening American Leadership in Digital Financial Technology.” The order aims to establish the United States as a global leader in blockchain innovation while reducing regulatory uncertainty for the crypto industry.

Key Provisions

1. Safeguarding American Crypto Rights - the order protects the rights of U.S. individuals and entities to:
   • Access and use public blockchain networks.
   • Develop and deploy blockchain software.
   • Engage in crypto mining and transaction validation.
   • Exercise rights to self-custody of digital assets.
2. Fair Access to U.S. Banking System 
   • The EO mandates fair access to banking services for law-abiding individuals and businesses in the digital asset space. 
   • This would end “Operation Chokepoint 2.0,” which many in the industry believe led to blacklisting of crypto businesses or people by financial institutions.
3. Promoting the Dollar through Stablecoins:
   • The EO promotes the development of dollar-backed stablecoins to maintain the U.S. dollar’s dominance in this next era and maintain U.S. dominance in digital financial systems globally.
4. Central Bank Digital Currencies (CBDCs):
   • In a stark shift from the Biden admin, the EO explicitly bans the establishment or issuance of CBDCs in the United States, citing concerns over government overreach and financial privacy implications.
5. Revoking Previous Frameworks:
   • The EO rescinds key components of the Biden administration’s 2022 digital asset policy, including prior EOs and the Treasury’s Framework for International Engagement on Digital Assets.
6. Creation of a Presidential Working Group:
   • Chaired by the newly appointed “AI and Crypto Czar” David Sacks, the working group includes members across government, including the Treasury Secretary, SEC Chair, and Attorney General.
   • The group will develop risk management strategies, pro-innovation regulatory recommendations and new ideas like a “national crypto reserve,” which may be sourced from seized assets.
   • The group is set to develop comprehensive regulatory proposals for digital assets and stablecoins within 180 days. 

This innovation agenda offers tremendous opportunity for the digital asset and fintech sectors. Congress' ability to codify this all into clear, well-designed, pro-innovation, tech-neutral and adaptable legislation will be the final decider of what the new U.S. regulatory landscape looks like, but this EO and its prioritization is an essential first step forward. 

SEC Updates: Repeal of SAB 121 and Formation of a Crypto Task Force

The SEC, under Acting Chair Mark Uyeda, wasted little time in setting a new agenda of its own, with significant announcements that usher in a new era for securities law regulation and crypto. 

Repeal of Staff Accounting Bulletin 121 (SAB 121)

SAB 121, introduced in 2022, required companies holding digital assets for customers to recognize these holdings as liabilities on their balance sheets. While only interpretive guidance and not legally binding, this was yet another example of the Gensler-era SEC’s approach to force financial institutions to avoid crypto or face consequences. The guidance was widely criticized within the broader financial industry for its burdensome compliance costs and its chilling effect on institutional crypto adoption.

By March 2024, a bipartisan coalition of financial institutions, members of Congress and banking regulators came together to fight SAB 121. A from the Bank Policy Institute, American Bankers Association, Financial Services Forum and the Securities Industry Financial Markets Association argued that SAB 121 prevented banking organizations, which are separately subject to prudential regulations, from offering digital asset services to customers. Under this discriminatory regime, customers could not access products or services from the safest, most experienced custody providers.

The Conference of State Bank Supervisors also chimed in and argued that SAB 121 created concentration risk in the limited pool of custody providers and exposed customers to other issues. Congress successfully passed a bipartisan repeal of SAB 121 in 2024, but President Biden vetoed that legislation. 

Finally, on January 23, 2025, the SEC repealed SAB 121, removing the requirement and opening the door for traditional financial institutions to act as custodians of digital assets without the added balance sheet complexity and cost.

Impact of the Repeal:

• Banks and financial institutions are now able to provide custody services for crypto assets. The repeal reduces concentration risk and fosters easier crypto adoption in the U.S. 
• This should encourage greater institutional involvement in crypto and promote innovation and competition in fintech more broadly. 

Formation of a Crypto Task Force

Acting Chair Mark Uyeda also announced the formation of a dedicated crypto task force, led by longtime digital asset expert and advocate Commissioner Hester Peirce. Uyeda acknowledged that the SEC’s prior approach left “confusion about what is legal” and led to an “environment hostile to innovation and conducive to fraud.” The task force’s mandate is to develop a proactive and clear regulatory framework for digital assets, focusing on fostering innovation while ensuring investor protection. The creation of the task force signals yet another dramatic shift in the SEC’s approach and tone, moving from a war of regulation by enforcement to one that emphasizes constructive engagement with the crypto industry.

Potential Task Force Impact:

• Offering clear guidelines for the registration of crypto projects and who must register;
• Creating disclosure frameworks for tokens;
• Halting “regulation by enforcement” on day one;
• A likely regulatory sandbox approach built off Commissioner Pierce’s prior proposal to support emerging blockchain technologies with:
  • A clear path to compliance after development;
  • A three-year window to build without fear of enforcement actions;
  • A push for decentralization and compliance milestones;
  • The ability to distribute tokens during development;
  • Revamping FinHub to return to its roots as an innovative, experimental; department within the SEC;
  • Revamping FinHub to return to its roots as an innovative, experimental department within the SEC;
  • Engaging collaboratively with industry stakeholders to address compliance challenges; and
  • Approving staking via ETFs.

Together, the EO and SEC announcements indicate a concerted effort to align regulatory policy with the needs of a rapidly evolving global market and to reposition the United States at the forefront of the digital financial sector.

Key Takeaways:

• The EO’s focus on financial sovereignty rights and stablecoins aims to position the U.S. as the global capital for crypto and digital financial innovation.
• The repeal of SAB 121 reduces barriers for traditional institutions to participate in the crypto economy, bringing banks and other financial players off the sidelines and into the crypto arena. 
• The repeal of SAB 121 and formation of the crypto task force are a significant sea change in the regulatory posture of the SEC and represent an aggressive departure from the slower-moving process in which the SEC has previously engaged—not just under President Biden, but in earlier administrations as well.
• It is noteworthy that much has happened before confirmation of Paul Atkins as SEC Chairman and without as much of a public meeting or debate.
• The formation of the SEC’s crypto task force should end so called “regulation by enforcement” and create a path to compliant U.S. token launches. 
• The ultimate say rests with Congress and, until new laws and/or regulations are finalized, the securities laws as written in the 1930s and 40s still exist and (poorly) apply to digital assets. State regulators and private plaintiff’s lawyers are also still active and will continue to target crypto companies and investors. 
• There is much opportunity ahead and investors and entrepreneurs should consult with legal counsel on the best way to position themselves in this new regulatory climate and to mitigate the remaining risks.