Republican lawmakers are once again taking a stand against a rule that they believe could have detrimental effects on the cryptocurrency industry. Over 40 lawmakers have called on the US Securities and Exchange Commission (SEC) to reverse a decision regarding Staff Accounting Bulletin No. 121 (SAB 121), which requires crypto custodians to record digital assets as liabilities on their balance sheets.
Led by Senator Cynthia Lummis and House Financial Services Chair Patrick McHenry, the lawmakers argue that this rule discourages banks from handling crypto, potentially shifting the responsibility onto less regulated entities. They believe this could increase risks for the industry and its consumers.
In a letter to SEC Chair Gary Gensler, the lawmakers also criticized the implementation of the rule, claiming that the SEC bypassed the formal process for public input on new regulations. They further allege that the SEC worked privately with select institutions to help them avoid complying with the rule, raising concerns about transparency.
This latest push to repeal SAB 121 follows a previous attempt by Congress, which was vetoed by President Joe Biden due to concerns about investor protection. With bipartisan support in Congress but falling short of the required two-thirds majority to override the veto, the fight over SAB 121 continues.
The SEC has faced criticism for its approach to regulating crypto, with some lawmakers advocating for clearer guidelines rather than enforcement actions. The ongoing pressure from lawmakers indicates that the debate over SAB 121 and crypto regulation in the US is far from over, leaving the industry’s future uncertain.
