US lawmaker Wiley Nickel has taken a stand against the SEC’s Staff Accounting Bulletin 121 (SAB 121), calling for its repeal before an impending Senate vote. This bulletin mandates financial institutions custodying crypto assets to include them on their balance sheets. Many stakeholders in the industry have voiced their concerns about the regulation, arguing that it stifles growth within the sector.
Despite the growing opposition to SAB 121, President Joe Biden has made it clear that he would veto any attempt to overturn the regulation. The Biden administration has stated that it “strongly opposes” any changes to SAB 121, citing the need to protect crypto investors as the primary reason for their stance.
Recently, the House of Representatives, known for its non-partisan nature, passed a resolution rejecting SAB 121. This move indicates a shift in sentiment towards the controversial regulation and sets the stage for further debate in the Senate. In a letter addressed to SEC Chair Gary Gensler on May 15, lawmaker Wiley Nickel urged the commission to reconsider its position on SAB 121.
Impact on Investors and Financial Institutions
Nickel highlighted the detrimental effects of SAB 121 on US investors, noting that it has prompted them to seek offshore custody options for their digital assets. Additionally, he emphasized that the regulation has prevented highly regulated American banks from offering custody services for newly introduced Bitcoin ETFs, thereby limiting their participation in the evolving crypto landscape.
In his criticism of the SEC, Wiley Nickel raised concerns about the process through which SAB 121 was implemented. He argued that the Staff Accounting Bulletin should clarify existing policies, not introduce new ones without proper oversight. By circumventing the rulemaking process, the SEC has demonstrated a lack of transparency and foresight in its approach to regulating the digital assets industry.