House Financial Services Committee Votes In Favor of Resolution to Overturn SEC’s SAB 121
The House Financial Services Committee voted on Thursday to proceed with a resolution that would “reverse” the United States Securities and Exchange Commission’s (SEC) controversial digital asset accounting bulletin, SAB 121.
The resolution, brought forward by representatives Mike Flood (R-NE) and Wiley Nickel (D-NC), was passed by a majority of committee members in hopes of overturning the bulletin. Known as SAB 121, the bulletin would force banks to list custodial cryptocurrencies on their balance sheet, effectively limiting them from participating in the digital asset ecosystem
Congressman Flood expressed his disapproval of the SEC’s bulletin, claiming it would have serious ramifications for the banking industry as a whole.
.@SECGov has virtually locked out the most regulated institutions from serving as custodians for digital assets. It’s time to roll back SAB 121 and to stop @GaryGensler’s overreach. pic.twitter.com/n3xWRhPMWq
— Rep. Mike Flood (@USRepMikeFlood) February 29, 2024
“The ramifications of requiring banks to hold these assets on-balance sheet are pretty significant,” he remarked. “If a bank were to custody digital assets according to the parameters of SAB 121, the on-balance sheet treatment would affect their other regulatory obligations like their capital and liquidity requirements. The end result is that banks must choose to either custody digital assets—thus inflating their balance sheet and severely affecting every other line of business or stay out of the market.”
Additionally, Flood took issue with the fact that banks are currently prevented from serving as custodians for the recently SEC-approved spot Bitcoin ETFs under SAB 121.
“That’s a situation where you might want more bank custodians, who are
Read more on cryptonews.com
