SEC's Decision Lowers Entry Barrier for Crypto Market Over a year has passed since January 2025, when the U.S. Securities and Exchange Commission (SEC) dramatically eased regulations concerning cryptocurrency custody services, marking a new turning point for the digital asset market. On January 23, 2025, the SEC officially announced the withdrawal of the controversial Staff Accounting Bulletin No. 122 (SAB 122), clearly stating its intention to significantly lower market entry barriers. The effects of this decision are now becoming visible across the financial market. This move is regarded as the removal of a major regulatory hurdle that had previously hindered traditional financial institutions from entering the cryptocurrency space, and the global financial industry continues to monitor its ripple effects. SAB 122 had previously made it economically challenging for listed financial institutions to offer custody services by requiring them to record cryptocurrencies held on behalf of clients as both a liability and an equal amount as an asset on their balance sheets. This dual-entry accounting method artificially inflated banks' balance sheets, increasing their debt-to-asset ratio and imposing the burden of raising additional capital. For large listed banks, in particular, the requirement to prepare additional capital commensurate with billions of dollars in crypto custody assets was identified as a key factor deterring them from offering such services. Such policy weaknesses had been cited as limiting the expansion of the digital asset ecosystem, making the withdrawal decision in early 2025 a pivotal change for the cryptocurrency industry. This change, however, was not merely a policy alteration by the SEC. It was part of a comprehensive strategy for federal-level digital asset regulatory recalibration that took place from 2025 to early 2026. For instance, the U.S. Federal Deposit Insurance Corporation (FDIC) officially withdrew Financial Institution Letter 16-2022 in March 2025. This was a significant change as it exempted financial institutions from the cumbersome process of obtaining prior regulatory approval before engaging in crypto-related activities. With the withdrawal of this letter, FDIC-supervised banks could pursue new digital asset-related businesses more swiftly, and indeed, several major banks announced the launch of cryptocurrency custody services starting in the latter half of 2025. However, the SEC's decision did not immediately grant unconditional freedom to the market. Despite the withdrawal of SAB 122, companies are still required to assess the existence of contingent liabilities under the Financial Accounting Standards Board (FASB) or International Financial Reporting Standards (IFRS), and existing disclosure requirements under Regulation S-K remain applicable. Specifically, Items 101, 105, and 303 of Regulation S-K demand detailed disclosures to ensure investors clearly understand financial institutions' obligations to protect crypto assets held on behalf of others. These function as minimal safeguards to maintain market accounting integrity and investor protection. Therefore, while this change represents a step forward in terms of regulatory easing, it still operates under certain constraints, making it not a complete liberalization. Impact of SAB 122 Withdrawal on Financial Institutions Nevertheless, over the past year, as the interface between traditional financial institutions and the digital asset market has expanded, various positive ripple effects have emerged. Firstly, the credibility of the cryptocurrency market has significantly improved. This is because traditional financial institutions have begun directly offering digital asset services, creating a more stable and trustworthy trading environment for investors. From mid-2025, several major banks officially launched cryptocurrency custody services targeting institutional investors, contributing to cryptocurrencies shedding their speculative asset image and establishing themselves as more mainstream financial assets. Market experts analyze that this atmosphere has led to a large influx of institutional capital, with the proportion of institutional investment in the cryptocurrency market significantly increasing in the latter half of 2025 compared to the previous year. Furthermore, the entry of traditional financial institutions into the market is bringing significant changes to financial industry professionals worldwide, including in Korea. Korean financial institutions have previously hesitated to participate in the cryptocurrency custody market due to legal uncertainties and technological limitations. However, amidst the global trend of regulatory easing, centered around the U.S., related discussions are becoming active domestically as well. Major commercial banks are reportedly considering the introduction of digital asset custody services, and financial authorities are also known to have begun preparing relevant guideli