The US Senate is preparing to vote this Thursday on Joint Resolution 109*, which seeks to repeal SEC Staff Accounting Bulletin (SAB) 121. Sources indicate sufficient Democratic support for the measure to pass.
The resolution has already passed the House of Representatives with bipartisan support, challenging SAB 121. This bulletin requires digital asset custodians to list cryptocurrencies in their custody as liabilities and assets on their balance sheets.
Critics say the SEC issued SAB 121 without proper consultation or public comment, deviating from established accounting standards and potentially limiting consumers' options by counting clients' digital assets as institutional assets.
Influential Democrats, including senator and cryptocurrency advocate Kirsten Gillibrand (D-N.Y.), support the resolution. Gillibrand, along with other lawmakers, had previously opposed SAB 121, citing concerns about its impact on financial institutions and consumer protection.
Despite the expected Senate approval, the White House has signalled that President Joe Biden would veto the legislation if it were introduced. SEC Chairman Gary Gensler is defending SAB 121, saying it aligns with bankruptcy court precedent regarding cryptocurrency assets.
* Resolution 109 is a legislative proposal in the US Senate to rescind Staff Accounting Bulletin (SAB) 121, issued by the US Securities and Exchange Commission (SEC). This accounting bulletin specifies that companies that hold cryptocurrencies on behalf of customers must record them as both assets and liabilities on their accounting balance sheets. Resolution 109 was introduced in response to concerns that the requirement could unnecessarily complicate companies' accounting and limit consumers' financial options by treating their digital assets as institutional assets. By seeking to repeal SAB 121, lawmakers hope to ease regulatory burdens on cryptocurrency custodians and foster a more flexible environment for innovation and growth in the digital currency sector.
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