Congressman Wiley Nickel Criticizes SEC’s Stance on Crypto, Urges Withdrawal of SAB121

• Congressman Wiley Nickel has openly criticized SEC Chair Gary Gensler’s approach to crypto regulation.
• He has called for the withdrawal of the controversial staff accounting bulletin, SAB121.
• The congressman’s call comes amidst a Senate vote to nullify the bulletin.

In a recent development, Congressman Wiley Nickel has expressed his disapproval of SEC’s approach towards crypto regulation, urging the withdrawal of SAB121. This article delves into the details of the congressman’s criticism and the implications of this development on the crypto industry.

SEC and SAB121 Face Criticism from Congressman Wiley Nickel

Congressman Wiley Nickel, in a letter to SEC Chair Gary Gensler, voiced his concerns over the agency’s “open hostility” towards crypto and SAB121. He urged Gensler to withdraw the bulletin, emphasizing that such a move would be a positive step towards balancing crypto regulation and allowing for digital asset custodial banking. The congressman’s call comes amidst the Senate’s vote to nullify the controversial staff accounting bulletin.

Implications of SAB121 on Crypto Regulation

The SEC’s guidance on digital asset accounting, encapsulated in SAB121, has been a subject of criticism for its stringent capital requirements imposed on banks looking to enter the crypto space. Financial institutions are required to list clients’ liabilities alongside custodied digital assets on their balance sheets, a requirement that has been deemed overly restrictive by critics.

Gary Gensler Under Scrutiny as Senate Vote on SAB121 Looms

U.S. lawmakers have also raised concerns over the approval process of SAB121. Findings from the Government Accountability Office (GAO) reveal that the SEC failed to report the rule change under the Congressional Review Act (CRA). In the wake of these findings, the House passed H.J. Res 109, a bill introduced to invalidate SAB121. This move has led to a push in the Senate, led by Senator Cynthia Lummis, to follow suit.

President Biden’s Stance on the Issue

Despite the House passing the bill to invalidate SAB121, President Joe Biden has stated that he would veto attempts to make the bill a law. The President’s stance is based on the belief that limiting the SEC’s ability to maintain a comprehensive financial regulatory framework for crypto-assets would introduce substantial financial instability and market uncertainty.

Conclusion

As the Senate vote on SAB121 looms, Congressman Nickel’s letter to Gensler could be a last-minute push to get the SEC Chair to rescind the bulletin. The outcome of this development could have significant implications on the future of crypto regulation in the U.S.