The SEC Under Scrutiny for Allegedly Breaking the Law with SAB 121
The Securities and Exchange Commission (SEC) is facing intense scrutiny this week over allegations that it violated the law in the issuance of Staff Accounting Bulletin No. 121 (SAB 121).
One of the most critical voices in this debate is John Deaton, who tweeted that the SEC’s actions were a clear statement that they broke the law. Deaton’s tweet highlights the agency’s approach to governance and law enforcement in the crypto space.
A Ripple Lawsuit Draws Attention to the SEC’s Conduct
Deaton referred to a Ripple lawsuit where a federal judge criticized the SEC’s lawyers for lacking allegiance to the law. This brings attention not only to SAB 121 but also raises questions about the SEC’s entire operation.
Deaton asks whether the SEC, an institution meant to protect investors, is doing more harm than good and has become “inept and corrupt.”
Government Accountability Office Supports Deaton’s Accusations
The Government Accountability Office (GAO) declared that SAB 121 should be subject to Congressional review, lending weight to Deaton’s claims. The GAO stated that the bulletin must be submitted to Congress, contradicting the SEC’s earlier argument that it was not a “rule” under the Congressional Review Act.
Jake Chervinsky and other industry leaders have aligned themselves with the GAO’s declaration, asserting that SAB 121 was illegal and caused significant damage to the crypto industry. These voices raise serious concerns about the SEC’s authority and credibility.
The SEC Faces Uncertainty as Congressional Review Looms
With a bipartisan bill introduced to counter SAB 121 and a 60-day Congressional review period ahead, the SEC finds itself in a precarious position. The question now is not just whether SAB 121 will survive this review, but whether the SEC can maintain its credibility.
As Deaton’s tweet reverberates through legal circles and crypto forums, the SEC faces not only a review of a specific rule but also a crisis of institutional faith. The next 60 days will be crucial for both crypto regulation and the future of the SEC.
Hot Take: The SEC’s Credibility Hangs in the Balance
The Securities and Exchange Commission (SEC) is facing mounting criticism over allegations that it broke the law with Staff Accounting Bulletin No. 121 (SAB 121). Prominent voices like John Deaton have accused the SEC of deviating from its mission and becoming “inept and corrupt.” The Government Accountability Office (GAO) has supported these claims by declaring that SAB 121 should be subject to Congressional review. Industry leaders like Jake Chervinsky have also criticized the bulletin for causing significant damage to the crypto industry. With a bipartisan bill introduced to counter SAB 121 and a Congressional review looming, the SEC’s credibility hangs in the balance. The next 60 days will be crucial for both crypto regulation and the future of the SEC.
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