House Financial Services Committee Chairman Patrick McHenry, R-N.C., said he aims to take action to repeal a Securities and Exchange Commission bulletin that sets specific accounting standards for companies that store cryptocurrencies.
Sen. Cynthia Lummis (R-Wyo.) and Rep. Mike Flood (R-Neb.) and Wiley Nickel (D-N.C.) introduced the joint bill. solve On Thursday, it blocks the SEC’s Staff Accounting Bulletin No. 121, known as SAB 121. notice board Companies that store cryptocurrency must record their customers’ cryptocurrency holdings as liabilities on their balance sheets.
“There is bipartisan agreement that SAB 121 weakens consumer protections and leaves customers’ digital assets vulnerable,” McHenry said at the X on Thursday. “I look forward to getting this bill across the finish line and overturning it.”
Crypto-friendly McHenry has led various efforts to advance cryptocurrency legislation and serves as chairman of the House Financial Services Committee, which oversees the SEC.
SAB 121 has received backlash from cryptocurrency advocates since it was issued in March 2022.illogical.” Others said it should come in the form of formal rules. SEC Chairman Gary Gensler defended the bulletin in bankruptcy court, citing concerns about customers.
The Financial Services Forum, a banking advocacy group, expressed concerns in a statement about the resolution Thursday.
“The nation’s largest banks are subject to the highest prudential requirements,” the forum said. “Unfortunately, the significant capital requirements contained in the SEC’s SAB 121 make it impossible for banks today to securely provide digital asset custody services.” revealed.
GAO report
Lawmakers were expected to bring up SAB 121 in 2024 after the Government Accountability Office (GAO), an agency watchdog, said last October that the guidance was required by law to be submitted to Congress before it could take effect.
According to GAO, this notice is subject to the Congressional Review Act, which requires agencies to submit reports on rules to Congress. Enacted in 1996, the CRA aims to strengthen congressional oversight of agency rulemaking. Lawmakers submitted a joint resolution to the CRA on Thursday.
Rep. Flood on Thursday accused the SEC of overreaching.
“The SEC issued SAB 121 without consulting with prudential regulators, and the SEC issued SAB 121 without engaging in a notice and comment process, despite the accounting standards’ impact on the treatment of custody assets by financial institutions,” Flood said in a statement. He said. “It is Congress’ role to act as a check in the face of regulatory overreach.”
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