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US Congressmen Oppose the SEC's Controversial Cryptocurrency Accounting Rule
An alliance of U.S. legislators from both parties is attempting to reverse the SEC's accounting rule that penalizes businesses for holding cryptocurrency on behalf of their clients.
Members of Congress, as reported by CoinDesk, are attempting to repeal the contentious accounting bulletin issued by the U.S. Securities and Exchange Commission (SEC), which places limitations on organizations that wish to store the cryptocurrency assets of their clients. Thursday, corresponding resolutions were introduced in the Senate and House of Representatives by Sen. Cynthia Lummis (R-Wyo.), Reps. Wiley Nickel (D-N.C.), and Mike Flood (R-Nebraska). The purpose of these resolutions is to formally denounce the accounting rule and declare it to be without legal force.
According to SAB 121, or 2022 staff accounting bulletin No.121 of the SEC, a firm that holds cryptocurrencies for a client must reflect those holdings on its own balance sheet. As a result, financial institutions that wish to possess cryptocurrencies may be required to maintain a substantial quantity of capital to offset the associated risk. This has generated considerable resistance from the digital assets industry. Last year, the Government Accountability Office determined that the SEC ought to have communicated this policy to legislators and issued a new rule in accordance with the necessary procedures.
Using the Congressional Review Act, the legislators passed the resolution in an effort to repeal the SEC's work. The SEC did not provide immediate responses to requests for comment regarding the most recent opposition to the bulletin from their spokespersons. Chamber of Digital Commerce and other crypto lobbying organizations praised the effort. CEO of the Chamber Perianne Boring stated in a statement that institutions have been deterred from offering digital asset custody alternatives by the stringent requirement.
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