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Post: Congress Members Take Action to Repeal SEC’s SAB 121 on Cryptocurrency Assets

Congress Members Take Action to Repeal SEC’s SAB 121 on Cryptocurrency Assets

Key Points:

  • Congress members Mike Flood, Wiley Nickel, and Senator Cynthia Lummis have submitted resolutions to remove the SEC’s Staff Accounting Bulletin 121 (SAB 121).
  • SAB 121 currently requires banks to keep clients’ cryptocurrency assets on their balance sheets.
  • The congress members introduced a resolution under the Congressional Review Act to formally disapprove of the accounting rule.
  • Congressman Flood criticized the SEC for issuing SAB 121 without consulting prudential regulators and bypassing the required notice-and-comment process.

Insight:

Congress members Flood, Nickel, and Senator Lummis are taking action to repeal the SEC’s SAB 121, which places limitations on banks holding cryptocurrency assets for their clients. The introduction of the resolution under the Congressional Review Act aims to formally invalidate the accounting rule and deem it legally ineffective. Congressman Flood raised concerns about the SEC’s lack of consultation and bypassing of regulatory processes in issuing SAB 121. This move by the congress members demonstrates their intent to hold regulators accountable and prevent regulatory overreach.

Hot Take:

This resolution by congress members Flood, Nickel, and Senator Lummis reflects a broader concern among legislators about the regulatory environment surrounding cryptocurrencies. The pushback against SAB 121 highlights the potential for tensions between regulatory bodies and the need for greater collaboration and transparency in the development of regulatory frameworks for emerging technologies. As cryptocurrencies continue to gain mainstream attention, it is crucial for regulators and lawmakers to engage in meaningful dialogue to strike a balance between protecting investors and fostering innovation.

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