“Congress Takes Aim at SEC’s Crypto Regulation“
In a rare show of bipartisan unity, members of the United States Congress have united to oppose the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121 (SAB 121). The focus of this joint effort is on the bulletin’s requirement for banks to include customers’ crypto assets on their balance sheets. Leading this initiative are representatives such as Senators Cynthia Lummis and Kirsten Gillibrand, along with Patrick McHenry, French Hill, Ritchie Torres, Mike Flood, and Wiley Nickel.
The concern is that the mandate sets a different standard for crypto holdings compared to other assets, potentially discouraging regulated banks from serving as crypto custodians. As a result, these representatives have issued a memo urging financial authorities to reevaluate and clarify the enforceability of SAB 121, particularly in light of a recent Government Accountability Office (GAO) finding.
“GAO Evaluation Sparks Congressional Concern“
The GAO’s involvement stems from a letter by Senator Lummis to the U.S. Comptroller General in August 2022. The GAO was tasked with evaluating whether SAB 121 falls under the category of a ‘rule’ as defined by the Congressional Review Act. This scrutiny has raised concerns among Congress members who fear that enforcing SAB 121 without proper regulatory compliance could set a dangerous precedent.
“Industry Pushback Against SEC’s Crypto Policy“
The resistance to SAB 121 extends beyond Congress. In June 2022, a group of five senators expressed their concerns about potential implications of this ‘backdoor regulation’ to SEC Chair Gary Gensler. Additionally, during Gensler’s appearance before the House Financial Services Committee in September, Representative Mike Flood voiced disapproval of the bulletin’s approach.
These legislative actions reflect growing sentiment in the financial and crypto industries against regulations perceived as overreaching or lacking clarity. Therefore, the challenge to SAB 121 marks a crucial moment in the ongoing dialogue between regulatory bodies and the world of digital assets.
“Hot Take: Cryptocurrency Industry Pushes Back Against SEC’s Regulatory Overreach“
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. I write extensively on topics such as blockchain, cryptocurrency, tokens, and more for many publications. My goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good. The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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