SEC protection law has made crypto regulation a ‘political football’ – Rep. Nickell
The US securities regulator has turned crypto regulation into a “political football” and its “blatant hostility” is not helping President Joe Biden, Rep. Willie Nickell said.
In a May 15 letter to Securities and Exchange Commission Chairman Gary Gensler, Democrat of Nickelodeon, the regulator said it violated its mandate to protect investors and violated its authority by trying to pass the controversial Staff Accounting Bulletin 121, or SAB 121.
SAB 121 is a bill that would require SEC reporting entities to record their holdings of crypto on their balance sheets as liabilities.
Nickell says it prevents US banks from holding crypto-exchange-traded products in moderation – which would create a “concentration risk” by giving non-bank entities more control.
He added that the SEC's “blatant hostility” to the cryptocurrency industry “is not serving President Biden's interests.”
“The SEC is turning cryptocurrency regulation into a political football and forcing President Biden to choose a side on an issue with many Americans,” wrote a North Carolina representative.
Nickell wants Gensler to withdraw SAB 121, but is confident the Senate will pass a resolution overturning the SEC's proposed rule when it votes on the issue on May 16.
“I hope this bipartisan, bipartisan decision sends a message: It's time to fix the SEC's misguided approach to digital assets.”
The House of Representatives voted to approve a bill that repealed SAB 121 last week.
The last stand for the bill before repealing the law will be on Biden's desk — he has said he will veto the bill if it gets to that point.
Related: SEC's Gary Gensler gets upset when asked about crypto
Nickel is concerned that SAB 121 may lead many US investors to seek offshore solutions, which could prove “dangerous” in the long run.
Many Republicans share his position, including U.S. Rep. Tom Emmer, who says SAB 121 will make U.S. markets “fairer, less orderly and more efficient.”
The SEC's statutory mission is to protect investors, facilitate capital formation, and maintain fair, orderly, and efficient markets.
Chairman Gensler is violating all three of these with the illegal SAB 121 rule. pic.twitter.com/Wky2K8zglR
— Tom Emer (@GOPMajorityWhip) May 7, 2024
SAB 121 was introduced by the SEC in March 2022.
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