US Legislators Introduce Resolution to Overturn SEC Directive on Crypto Assets
A Congressional Review Act (CRA) resolution has been proposed by North Carolina Representative Wiley Nickel, along with Senator Cynthia Lummis and Representative Mike Flood. This resolution aims to overturn the Securities and Exchange Commission’s (SEC) directive that requires banks to include customer cryptocurrency assets on their balance sheets. The resolution could potentially remove a major obstacle for institutional adoption of Bitcoin and other digital assets in the US.
Challenging the SEC’s Staff Accounting Bulletin 121
The CRA resolution specifically targets the SEC’s Staff Accounting Bulletin (SAB) 121, which was issued in March 2022. This bulletin demands that financial institutions reflect an equivalent liability on their balance sheets for each digital asset held. The digital asset sector has criticized this requirement for its potential to hinder the operational viability of digital asset custodians.
Importance of SAB 121 for Institutional Adoption
The CEO of the Chamber of Digital Commerce, Perianne Boring, emphasized the significance of overturning SAB 121 for institutional adoption. In a statement, the Chamber applauded Senator Lummis, Representative Flood, and Representative Nickel for their bipartisan initiative. The Chamber criticized the SEC for bypassing established procedures with SAB 121 and compromising transparent and inclusive governance.
The Chamber of Digital Commerce’s Token Alliance has been actively challenging SAB 121, submitting letters to Congress and engaging with governmental bodies like the Government Accountability Office (GAO). Their efforts have contributed to the bipartisan support against SAB 121.
Bipartisan Support for Overturning SAB 121
Representative Mike Flood and Chairman of the Financial Services GOP, Patrick McHenry, both expressed their support for repealing SAB 121. Flood stated that SAB 121 has hindered banks from serving as custodians of digital assets, while McHenry emphasized the bipartisan agreement on the undermining of consumer protection and vulnerability of customers’ digital assets.
Implications for Institutional Adoption
The introduction of the CRA resolution is a significant development in the relationship between digital asset markets and regulatory frameworks in the US. The outcome of this legislative effort could greatly impact the institutional adoption of Bitcoin and other cryptocurrencies.
Hot Take: Congressional Resolution Aims to Clear Path for Crypto Adoption
A Congressional Review Act (CRA) resolution has been put forth by US legislators to overturn a Securities and Exchange Commission (SEC) directive requiring banks to include customer cryptocurrency assets on their balance sheets. This resolution, targeting the SEC’s Staff Accounting Bulletin (SAB) 121, aims to remove barriers hindering institutional adoption of Bitcoin and other digital assets. The Chamber of Digital Commerce has praised this bipartisan initiative and criticized the SEC for compromising transparent governance. With support from both Republicans and Democrats, there is hope that SAB 121 will be overturned, paving the way for increased institutional adoption of cryptocurrencies.
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