Senators Lummis and McHenry Urge SEC to Revoke SAB 121

As a seasoned crypto investor who has weathered numerous market fluctuations and regulatory challenges, I find the ongoing debate surrounding SAB 121 to be both intriguing and crucial for the future of our industry. The fact that Senators like Cynthia Lummis and House Financial Services Committee Chairman Patrick McHenry are taking a stand against this rule is promising, as their experience in navigating complex financial regulations lends credibility to their concerns.


Senators Cynthia Lummis and Patrick McHenry have requested that the United States Securities and Exchange Commission (SEC) reconsider and rescind Staff Accounting Bulletin 121 (SAB 121).

As a concerned crypto investor, I recently penned a letter to Chairman Gary Gensler of the Securities and Exchange Commission (SEC), expressing my deep-rooted concerns about the rule’s detrimental effects on our thriving cryptocurrency industry. I humbly request that this rule be reconsidered or withdrawn altogether, in light of the upcoming oversight hearings that will shape the future of our digital economy.

According to the SAB 121 rule, digital asset custodians must record their clients’ assets as liabilities in their financial statements, which Senators Lummis, McHenry, and other bipartisan legislators believe unnecessarily increases the burden for these companies.

The group of senators and representatives argue that the rule excessively burdens custodians with legal responsibilities and potentially exposes consumers to greater risk. In their letter, they emphasize that SAB 121 was enacted without sufficient discussion or adherence to necessary steps in the process.

Congressman Ritchie Torres has voiced his criticism towards the SEC, claiming they’ve been improperly using SAB 121, which goes against common accounting practices (GAAP). Critics contend that this regulation hinders financial innovation and creates complexities in the development of cryptocurrencies within the U.S.

Lawmakers voiced worry over the Securities and Exchange Commission (SEC) seemingly favoring some industries when enforcing Rule X, allegedly due to private discussions with specific industry figures exempting them from the reporting obligations outlined in SAB 121.

As SEC Chairman Gensler prepares for his upcoming testimony in Congress, legislators are likely to grill him on the Securities and Exchange Commission’s regulatory strategy concerning digital currencies, with a focus on SAB 121 and the broader scope of their regulatory actions.

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2024-09-24 09:08