Summary
A bipartisan group of congressional leaders, including Sen. Cynthia Lummis, Rep. Mike Flood, and Rep. Wiley Nickel, have introduced a joint resolution to repeal the Securities and Exchange Commission’s (SEC) accounting standards for crypto custodians. The SEC’s Staff Accounting Bill (SAB) 121, enacted in April, requires digital asset custodians to report liabilities and corresponding assets on their balance sheets. The resolution aims to overturn this requirement, with critics arguing that issuing guidance through SABs is insufficient and that affected parties should be consulted. SABs are not official rules and do not require public notice or comment periods. The resolution must pass both Chambers to become law.
Key Points
1. A group of bipartisan congressional leaders, including Sen. Cynthia Lummis, Rep. Mike Flood, and Rep. Wiley Nickel, have introduced a joint resolution to overturn the Securities and Exchange Commission’s (SEC) latest accounting standards for crypto custodians.
2. The SEC’s Staff Accounting Bill (SAB) 121, enacted in April, requires digital asset custodians to report a liability and “corresponding assets” on their balance sheets to safeguard against risks associated with safeguarding crypto assets.
3. The Government Accountability Office (GAO) found that the SEC had failed to follow the Congressional Review Act (CRA) when issuing SAB 121. Commissioner Hester Peirce also criticized the bulletin, arguing for a more consultative approach to changing rules in order to encourage companies to enter public markets.