Regulation
Wiley Nickel Slams SAB121, SEC’s ‘Open Hostility’ Toward Crypto
Last updated: May 15, 2024, 3:08 p.m. EDT | 1 minute reading
Congressman Wiley Nickel (D-CA) criticized SEC Chairman Gary Gensler for the agency’s “open hostility” toward crypto and SAB121. Nickel sent a letter to Gensler on Wednesday urging him to rescind the controversial personnel accounting report card amid the Senate’s vote to overturn it.
SEC and SAB121 face criticism from Rep. Wiley Nickel
Nickel wrote: “I strongly encourage you to withdraw SAB121 to protect investors, strengthen American competitiveness, and respect Congress’s role in the administrative rulemaking process. »
He emphasized that withdrawing SAB121 before the Senate vote would be a positive step towards balancing crypto regulation and establishing digital asset custody banking services.
The SEC’s guidance on accounting for digital assets has long been criticized for its strict capital requirements for banks looking to get into crypto. Participating financial institutions are required to record customer debts as well as retained digital assets on their balance sheets.
Today I sent a letter to @SECGov Chairman Gary Gensler has asked the agency to withdraw its Staff Accounting Bulletin 121. Unfortunately, the SEC is turning to #crypto in a political football and forcing @POTUS to unnecessarily choose sides on an issue that matters to many Americans. pic.twitter.com/F3L8fZSNR0
– Rep. Wiley Nickel (@RepWileyNickel) May 15, 2024
In addition to scrutiny of the bulletin’s regulatory position, U.S. lawmakers have questioned the approval process for SAB121. The Government Accountability Office (GAO) found that the The SEC did not report the rule change under the Congressional Review Act (CRA).
Gary Gensler under fire from US lawmakers as Senate SAB121 vote nears
Last week, the House passed HJ Res 109, a bill that Nickel and Rep. Mike Flood (R-NE) introduced to strike down SAB121. Following the House vote, Sen. Cynthia Lummis (R-WY) led the Senate’s effort to invalidate the controversial accounting report.
“SAB 121 prevents well-regulated banks from protecting digital assets, making the industry less safe for consumers,” Nickel said in a statement last week. “Gary Gensler and the SEC deliberately circumvented the usual regulatory process, amounting to a clear overreach of agency authority.”
However, shortly after the House passed the Flood and Nickel bill, President Joe Biden said he would veto attempts to make the bill into law because it was “published in response to demonstrated technological, legal and regulatory risks that have caused substantial losses to consumers. »
“Limiting the SEC’s ability to maintain a comprehensive and effective financial regulatory framework for crypto-assets would introduce significant financial instability and market uncertainty. » a May 8 letter from the White House states.
If the Senate passes Lummis’ companion legislation, Nickel’s letter to Gensler could be a last-minute attempt to get Gensler to rescind SAB121 before it reaches Biden’s desk.