Regulation
Senate approves resolution rolling back SEC rule on crypto assets
The US Senate has passed a resolution rescinding Staff Accounting Bulletin (SAB) 121 of the US Securities and Exchange Commission (SEC).
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SAB 121 provides guidance to entities related to the accounting treatment of crypto asset safeguarding obligations.
Last November, a bipartisan group of members of Congress, including U.S. Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY), as well as U.S. Representatives Wiley Nickel (D-NC), Mike Flood (R- NE), Patrick McHenry (R-NC), French Hill (R-AR) and Ritchie Torres (D-NY), urged financial regulators to clarify that SAB 121 is not enforceable after the Government Accountability Office (GAO ).
It was later determined that the rule should be addressed by a Congressional Review Act (CRA) resolution. On February 1, Lummis, Nickel and Flood introduced a bipartisan, bicameral Congressional Review Act resolution to overturn the U.S. Securities and Exchange Commission’s Staff Accounting Bulletin 121. The resolution passed the Senate by a vote of 60 to 38. was approved in the House.
“SAB 121 was a disaster from the start. The SEC should never set policy – regarding banks, no less, an industry it does not regulate – through a staff accounting bulletin. This is nothing more than this administration attempting to circumvent the law while also eliminating critical consumer protections,” Lummis said. “This is a victory for financial innovation and a clear rebuke of how the Biden administration and President Gary Gensler have treated crypto assets and is the first time both chambers of the Congress passes standalone crypto legislation. President Biden should take note of the bipartisan support this CRA has received in both the House and Senate and sign it.
SIFMA, an organization that represents brokers and asset managers, welcomed the adoption of the resolution.
“The significant bipartisan vote in both houses of Congress shows a stark contrast between Congress and the SEC. SAB 121 would fundamentally change how financial institutions are supposed to report on the custody of digital assets, and the SEC issued the SAB without stakeholder engagement or consultation with prudential regulators. This rating agency would benefit investors, financial markets and the general public by restoring the ability of well-regulated financial institutions to provide digital asset custody services. We urge President Biden to quickly sign this resolution,” said Kenneth E. Bentsen, Jr., President and CEO of SIFMA.