On Monday, a group of more than 40 Republican lawmakers urged US Securities and Exchange Commission Chairman Gary Gensler to rescind the agency's controversial crypto protection rule.
of LetterLed by House Financial Services Committee Chairman Patrick McHenry, Senator Cynthia Lummis and 40 other bipartisan lawmakers, Congress passed Staff Accounting Bulletin No. 121 (SAB 121) after the bipartisan repeal. President Joe Biden later voted.
The SEC's lack of clearer crypto regulations has become a central issue among critics who say the agency is pursuing regulation through litigation. Meanwhile, SAB121, which comes into effect in March 2022, has been criticized by critics as disrupting traditional accounting standards and placing unnecessary burdens on financial institutions.
Legislators also said SAB 121, which requires crypto custodians to recognize digital assets as debt on their balance sheets, could increase consumer concerns, stifle financial innovation, and prevent banks from providing custodial services for cryptocurrencies.
SAB 121 “deviates from the established accounting standards, fails to accurately reflect the basic legal and economic obligations of the guardian, and exposes consumers to serious losses,” the politicians wrote in their letter.
The regulation was originally designed to address the risks associated with holding digital assets, but opponents argue that it has the opposite effect.
They say crypto protection stifles innovation by putting it in the hands of non-banks, which they believe could lead to clustered risks in the industry.
Critics of SAB 121 have accused the SEC of violating the Administrative Procedure Act, which requires formal notice and comment periods for new regulations.
In the letter, he pointed out that there is a lack of clarity around the implementation of SAB 121. The regulator did not immediately return a request for comment.
Although President Biden reversed his decision to repeal SAB 121 in June, citing concerns about financial stability and investor protection, the issue remains controversial.
US House of Representatives July 10, 2024 Tried to override President Biden's veto, but failed. failed The necessary two thirds to reach the highest level.
The vote fell short of the required threshold of 207 Republicans and 21 Democrats in favor of repeal. A similar voting pattern was observed when the bill was first voted on in May.
Ultimately, 183 Democrats voted against the measure, blocking the repeal and signaling a major setback to the repeal effort. That has further angered those who conflict with the regulator's views on the industry.
A panel of judges in a recent federal court hearing tense The SEC's long-standing approach has raised the risk of “coercive regulation” in sporadic lawsuits, as SEC lawyers have refused to issue the agency's special rules for crypto tokens.
The judges expressed frustration with the SEC's failure to clarify whether major cryptocurrencies such as Bitcoin and Ethereum fall under securities regulations.
Separately, the cryptocurrency exchange Kraken also responded to the SEC lawsuit Request a jury trialThe SEC failed to provide clear regulatory guidance arguing that crypto assets qualify as securities.
Edited by Sebastian Sinclair
Daily Debrief Newspaper
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