Summary
Lawmakers discussed whether the Securities and Exchange Commission needs reform after recent court loss. Representative French Hill criticized SEC’s actions against Debt Box. Hearing also focused on SEC’s approach to crypto companies and SAB 121 requiring digital asset custodians to report assets. Experts suggest rescinding SAB 121 and focusing on regulating crypto exchanges instead. Regulatory approach is seen as driving business overseas and creating uncertainty.
Key Points
1. Representative French Hill, R-AR, criticized the SEC for its recent court loss in the case against Debt Box, where the agency was sanctioned by a Utah-based judge for “bad faith conduct” and “gross abuse of power.”
2. John Gulliver, executive director of the Committee on Capital Markets Regulation, called for the rescinding of SAB 121, a SEC Staff Accounting Bill that would require digital asset custodians to report “corresponding assets” and liabilities on balance sheets for custodied cryptocurrencies.
3. Jennifer Schulp from the Cato Institute stated that the SEC’s current regulatory approach is driving business for newer technologies like AI and crypto overseas, making the regulatory environment uncertain and hostile.