- Congressional members urge the SEC to repeal the disastrous SAB 121 bill.
- Lawmakers argue that the bill undermines crypto custody rules and stifles financial innovation.
- MartyParty says that the potential cancellation of the bill will be the most bullish development.
Bipartisan members of Congress have called on the U.S. Securities and Exchange Commission (SEC) to revoke the controversial Staff Accounting Bulletin 121 (SAB 121).
In a letter led by House Financial Services Committee Chair Patrick McHenry and Senator Cynthia Lummis, lawmakers argued that the bulletin weakens crypto custody rules, potentially harming consumer protection and stifling financial progress.
The letter, dated September 23, 2024, addressed the urgency of overturning the “disastrous” SAB 121. Over 40 politicians urged SEC Chair Gary Gensler to annul the bill, arguing that it is “the only reasonable course of action and well within the SEC’s authority.”
What is SAB 121?
Introduced in 2022 by the SEC, SAB 121 requires public financial institutions to record crypto assets held for clients as liabilities on their balance sheets. The rule faced the ire of many as banks are exposed to a greater risk, with customers labeled unsecured creditors if a custodian goes bankrupt.
Read also: Bitcoin Surges as U.S. Congressman Accuses SEC of Obstructing Adoption
Earlier this year, Congress passed a bill aiming to repeal SAB 121. Lawmakers accused the SEC of breaching the Administrative Procedure Act, arguing the commission hurried through the implementation process without allowing for a standard public comment period. They contend that the SEC failed to follow proper rule-making protocols.
Will SAB 121 Be Overturned?
Crypto commentator MartyParty took to the X platform to share insights on lawmakers’ opposition to the bill. He stated, “If this rule is removed, it could be the most bullish event in US crypto adoption ever.”
Previously, Congress introduced legislation to overturn SAB 121. Though the bill received bipartisan support, President Joe Biden later vetoed the bill.
The President clarified that his priority remained protecting consumers and investors, making it clear that any measures deemed risky to their security will be opposed.
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