The Practicing Law Institute's "SEC Speaks" event showcased U.S. SEC Commissioner Hester Peirce, who criticized the agency's regulatory approach to the cryptocurrency industry, specifically focusing on Staff Accounting Bulletin 121 (SAB 121).
Peirce, recognized for her differing views within the Commission, raised concerns about the challenges presented by regulations such as SAB 121 and accompanying informal guidelines. She mentioned that these regulations create obstacles for businesses involved in managing digital asset storage.
Regarding SAB 121, which mandates companies holding cryptocurrency for clients to report it as a liability on balance sheets by March 2022, there is a debate between legislators and the crypto community. Some argue that this requirement may discourage banks from offering custody services for digital assets.
There have been attempts to challenge the bulletin's validity through legislative means, with claims that significant regulatory changes should be authorized solely by the Commission rather than through staff-level recommendations.
Commissioner Peirce highlighted a lack of substantial engagement between the SEC and stakeholders, pointing out that the agency's relationship with the public has weakened. She emphasized a shift away from encouraging open communication, leading to the disregard of public inquiries and concerns about crypto regulation.
In response to the controversy surrounding SAB 121, the House Financial Services Committee has initiated steps to question the bulletin's legitimacy, considering a resolution to repeal it if approved by both the House and Senate.
