Members
of
Congress
are
trying
to
delete
the
controversial
U.S.
Securities
and
Exchange
Commission
accounting
bulletin
that
implies
restrictions
on
companies
that
want
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
that
would
formally
disapprove
of
the
accounting
rule
and
conclude
that
it
has
no
legal
force.
The
SEC’s
2022
staff
accounting
bulletin
No.121,
commonly
known
as
SAB
121,
held
that
a
company
keeping
a
client’s
cryptocurrencies
should
do
so
on
the
firm’s
own
balance
sheet
–
which
could
force
banks
seeking
to
hold
crypto
to
maintain
what
they’d
view
as
an
onerous
amount
of
capital
to
compensate
for
the
risk.
The
move
was
greeted
with
an
uproar
from
the
digital
assets
sector.
When
a
federal
regulator
issues
staff
guidance,
it’s
supposed
to
be
advice
on
how
to
understand
and
interpret
existing
policy.
When
an
agency
inappropriately
uses
guidance
to
set
new
policy,
that
often
raises
the
ire
of
Congress.
And
that
was
the
finding
of
the
Government
Accountability
Office
last
year,
that
the
SEC
should
have
forwarded
this
policy
to
lawmakers
and
gone
through
the
other
hoops
required
of
the
agency
when
it
issues
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
didn’t
immediately
respond
to
a
request
for
comment
on
the
latest
opposition
to
the
bulletin.
“The
SEC
issued
SAB
121
without
conferring
with
prudential
regulators
despite
the
accounting
standard’s
effects
on
financial
institutions’
treatment
of
custodial
assets,
and
the
SEC
issued
SAB
121
without
going
through
the
notice-and-comment
process,”
said
Rep.
Flood,
in
a
statement.
“In
the
face
of
overreach
by
a
regulator,
it
is
the
role
of
Congress
to
serve
as
a
check.”
Crypto
lobbying
groups,
such
as
the
Chamber
of
Digital
Commerce,
praised
the
effort.
“Mandating
custodians
to
maintain
an
equal
asset
on
the
balance
sheet
as
a
liability,
it
demands
parity,
meaning
for
every
$100
in
bitcoin
held,
$100
in
a
similar
asset
must
also
be
held
on
the
balance
sheet,”
Chamber
CEO
Perianne
Boring
said
in
a
statement.
“This
stringent
requirement
has
proven
to
deter
institutions
from
offering
digital
asset
custody
options.”