Lawmakers Urge Banking Regulators to Disregard SEC\'s SAB 121: What\'s at Stake?
Financial authorities are facing pressure from Congress to disregard the SEC\'s SAB 121 rule dictating how banks handle cryptocurrency assets. The controversy surrounding Staff Accounting Bulletin No. 121 (SAB 121) continues to escalate, particularly as its two-year mark approaches. This comes after the SEC issued SAB 121, which many believe "upends bank custody rules for digital assets," according to a recent statement from lawmakers. marks a pivotal moment in this ongoing debate.
SAB 121 Under Fire: A Summary
More than 40 House and Senate Republicans recently urged Securities and Exchange Commission Chair Gary Gensler to rescind an SEC staff accounting bulletin. The lawmakers want to assess whether the SEC “undermined banking regulators” by issuing SAB 121. The core issue? The belief that SAB 121 creates unnecessary burdens and undermines existing regulatory frameworks.
The Heart of the Dispute: SAB 121 and Bank Custody Rules
At the heart of the debate lies the impact of SAB 121 on bank custody rules for digital assets. The lawmakers are seeking insight into discussions between the agencies regarding SAB 121 to assess whether the SEC undermined banking regulators with this siloed approach. The lawmakers are urging the regulators to clarify that SAB 121 is not enforceable considering the Government Accountability Office’s (GAO) finding that it constitutes a “rule” for purposes of the Congressional Review Act (CRA).
A Potential Resolution? SEC\'s SAB 122
Interestingly, The U.S. Securities and Exchange Commission (SEC) has officially axed the controversial Staff Accounting Bulletin 121 (SAB 121), removing it via a new policy, SAB 122. However, questions remain about the implications and long-term effects of this change, and lawmakers may still push for greater regulatory clarity. , could be a date when further updates arrive.