House Republicans urge SEC to repeal SAB121

More than 40 U.S. Republican lawmakers have called on the U.S. Securities and Exchange Commission (SEC) to revoke Staff Accounting Bulletin No. 121 (SAB 121).
House Financial Services Committee Chairman Patrick McHenry and Senator Cynthia Lummis
In a letter to the SEC, Bill L. Synthia Lummis and 40 politicians said SAB 121 "repeated custody rules for cryptocurrencies, weakened consumer protections, and undermined financial innovation."
They argued that SAB 121 is a provision that requires SEC reporting institutions that hold crypto assets to record those holdings as liabilities on their balance sheets, which would impede prudence.
It stressed that the accounting approach deviates from established accounting standards and was issued without proper regulatory consultation.
In addition, the provision does not reflect the legal and economic obligations of the trustee, and causes harm to consumers.
"By issuing this regulation as a staff guideline, the SEC avoided the notice and comment process required by the Administrative Procedure Act.
The only appropriate step is to repeal 121, which is well within the SEC's authority," he added. House Democrat Wiley Nickel previously said in a statement that the SAB
121 would prevent U.S. banks from custody cryptocurrency exchange-traded products (ETPs) on a large scale, posing concentrated risk by giving more control to non-bank institutions.
The letter was prepared ahead of a Sept. 24 hearing by the House Financial Services Committee on the SEC.