As a researcher with a background in financial regulation, I am closely following the developments surrounding the potential repeal of the Securities and Exchange Commission’s Staff Accounting Bill (SAB) 121. The upcoming vote in the House of Representatives on May 9, 2024, is a pivotal moment that could significantly impact digital asset regulation.
As an analyst, I’m closely following the developments surrounding the Security and Exchange Commission’s Staff Accounting Bill (SAB) 121. The outcome of this bill’s fate remains uncertain, with a critical vote scheduled in the House of Representatives on May 9, 2024. This proposed repeal, spearheaded by Representative Mike Flood, has the potential to significantly impact digital asset regulation if passed.
The House To Decide On Repeal Of Gary Gensler’s SAB 121
Rep. Flood strongly supports the approval of H.J. Res. 109 and expressed his stance in a recent post on X. He announced that the House will be holding a vote on rescinding SEC Chair Gary Gensler’s SAB 121 policy, and urged for the passage of H.J. Res. 109 using the hashtag #RepealSAB121, marking the beginning of an anticipated confrontation within the House of Representatives regarding this issue.
As a researcher studying the regulatory landscape of digital asset custody, I can tell you that starting in April 2022, the Securities and Exchange Commission (SEC) mandated that digital asset custodians must include liabilities and corresponding cryptocurrencies on their balance sheets. This requirement, championed by SEC Chairman Gary Gensler, is intended to address the substantial risks and uncertainties surrounding the safekeeping of crypto assets.
As a researcher studying the recent implementation of SAB 121, I’ve come across some disagreements among Committee members Mike Flood and Wiley Nickel. They contend that the process didn’t follow proper procedures. Rep. Flood specifically emphasized the importance of addressing the oversights in the issuance process.
He expressed that the SEC released SAB 121 without consulting the regulatory experts, specifically those responsible for overseeing bank custody. Senator Cynthia Lummis also stressed the importance of following established regulatory protocols, as emphasized in a GAO report published in October 2023. The report pointed out flaws in the approval process, leading to demands for SAB 121’s revocation.
House Of Financial Services Passes Resolution
During the heated discussion, supporters of the SAB 121 proposal argue that it promotes consumer protections. Representative Maxine Waters, a strong advocate for regulatory measures, emphasized, “Measures like SAB 121 serve to hinder fraudulent activities.” Using the failure of FTX as an example, Representative Waters emphasized the importance of shielding investors from the mismanagement of their crypto assets by custodians.
On February 29, the resolution managed to win a close committee approval in the House Financial Services with a vote of 31-20. This contentious issue drew backing from Democrats such as Reps. Wiley Nickel, Ritchie Torres, and Josh Gottheimer, demonstrating its bipartisan appeal.
As a researcher examining the ongoing debate surrounding the SEC’s SAB 121, I must acknowledge that the fate of this policy is still uncertain. In order for it to be abolished, the resolution calling for its termination must first overcome significant obstacles. Specifically, it needs to gain approval in both the House and the Senate. Only then can the SEC’s SAB 121 be effectively dismantled.
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2024-05-07 12:52