US Lawmakers Seek to Repeal SEC's Controversial Crypto Accounting Rule

According to CoinDesk, members of Congress are attempting to repeal the controversial U.S. Securities and Exchange Commission (SEC) accounting bulletin that imposes restrictions on companies wishing to hold their customer's crypto assets. Sen. Cynthia Lummis (R-Wyo.) and Reps. Wiley Nickel (D-N.C.) and Mike Flood (R-Neb.) introduced matching resolutions in the Senate and House of Representatives on Thursday, aiming to formally disapprove of the accounting rule and declare it has no legal force. The SEC's 2022 staff accounting bulletin No.121, also known as SAB 121, stated that a company holding a client's cryptocurrencies should do so on the firm's own balance sheet. This could force banks seeking to hold crypto to maintain a significant amount of capital to compensate for the risk, which has been met with strong opposition from the digital assets sector. The Government Accountability Office found last year that the SEC should have forwarded this policy to lawmakers and followed the required procedures when issuing a new rule. The lawmakers issued the resolution under the Congressional Review Act in an effort to repeal the SEC's work. Spokespeople for the SEC did not immediately respond to a request for comment on the latest opposition to the bulletin. Crypto lobbying groups, such as the Chamber of Digital Commerce, praised the effort. Chamber CEO Perianne Boring said in a statement that the stringent requirement has proven to deter institutions from offering digital asset custody options.