U.S. lawmakers are urging the Securities and Exchange Commission (SEC) to repeal Staff Accounting Bulletin No. 121 (SAB 121), which mandates cryptocurrency custody accounting guidelines for financial companies.
What is SAB 121?
SAB 121 provides guidance on how companies that hold cryptocurrencies on behalf of customers must account for them on their balance sheets. Under this mandate, companies are required to report these assets as liabilities while disclosing associated risks. The rule aims to increase transparency but has faced criticism for placing additional burdens on financial institutions that offer cryptocurrency custody services.
Bipartisan Push for Repeal
U.S. House Financial Services Committee Chairman Patrick McHenry and Wyoming Senator Cynthia Lummis have sent a letter to the SEC urging the agency to reverse its stance on SAB 121. They underscored that the bipartisan joint resolution (HJ Res. 109) to repeal SAB 121 reflects a strong message from Congress about the need to reassess regulatory requirements for the cryptocurrency industry.
Regulatory Debate Over Cryptocurrency Custody
The push to repeal SAB 121 is part of a larger debate surrounding cryptocurrency regulation in the United States. As the SEC seeks to implement policies ensuring transparency and accountability in the custody of digital assets, lawmakers and industry participants are calling for a more balanced approach that fosters innovation without imposing undue burdens on financial institutions.
As U.S. lawmakers continue to urge the SEC to repeal SAB 121, the debate over the future of cryptocurrency regulation in the United States intensifies. The bipartisan effort led by Patrick McHenry and Cynthia Lummis reflects growing concerns about the potential impact of SAB 121 on the cryptocurrency market. With the resolution facing a presidential veto, the ongoing conversation about balancing transparency and innovation in digital assets remains at the forefront of the regulatory landscape.
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