U.S. Congress Members Introduce Bipartisan Legislation to Challenge SEC’s SAB 121
U.S. Congress Members, including Senator Cynthia Lummis, Representative Wiley Nickel, and Mike Flood, have introduced bipartisan legislation in an effort to overturn the Securities and Exchange Commission’s (SEC) controversial Staff Accounting Bulletin 121 (SAB 121). This legislation aims to challenge SAB 121, which requires banks to include a corresponding liability on their balance sheets when safeguarding crypto assets.
Is the SEC Overstepping Regulatory Authority with SAB 121?
A press release from Senator Lummis’ office states that SAB 121 has serious implications for consumers and banks. It confuses the distinction between customer assets and bank assets, threatens custody services, and increases bankruptcy risk for consumers.
Congress Steps Up Crypto Regulation Efforts
Representative Nickel criticizes the SEC’s regulatory approach on digital assets as untenable. This is not the first time the SEC has faced claims that their regulatory stance is unsustainable. Coinbase’s chief legal officer previously stated that the SEC’s enforcement-only approach without clear rules harms America’s economic competitiveness. Regulatory uncertainty has also caused valuable crypto firms to move overseas.
SEC Chair Gary Gensler Doubles Down
The legislative pushback against the SEC’s SAB 121 has gained support from players in the banking industry. The Securities Industry and Financial Markets Association CEO highlights that SAB 121’s requirement for balance sheet recognition deviates from traditional asset accounting treatment. SEC Chair Gary Gensler defended SAB 121, stating that it addresses whether liabilities should be on a balance sheet.
Hot Take: U.S. Congress Members Challenge SEC’s Controversial Accounting Bulletin
U.S. Congress Members have introduced bipartisan legislation to challenge the SEC’s Staff Accounting Bulletin 121 (SAB 121). This legislation aims to overturn SAB 121, which requires banks to include a corresponding liability on their balance sheets when safeguarding crypto assets. Critics argue that SAB 121 confuses the distinction between customer assets and bank assets, threatens custody services, and increases bankruptcy risk for consumers. The pushback against SAB 121 reflects ongoing concerns about the SEC’s regulatory approach to digital assets and its potential negative impact on America’s economic competitiveness. Support from the banking industry further highlights the need for a deliberate and comprehensive regulatory process to avoid unintended consequences.
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