- The US Senate has voted to cancel the controversial rule SAB 121, which would significantly impact the custodial crypto services in banks.
- Ripple CLO Stuart Alderoty praised the Senate’s decision and criticized it as a victory against the SEC’s overreach.
- The rule would have forced banks to list their customers’ crypto assets on their balance sheets.
The US Senate has overturned a controversial rule that would have forced banks to list their customers’ crypto assets on their balance sheets, a move hailed by Ripple’s Chief Legal Officer as a victory against the SEC’s overreach.
Senate Overturns Controversial Rule SAB 121
The US Senate has voted to cancel a controversial rule proposed by the Securities and Exchange Commission (SEC) that posed a significant threat to custodial services for cryptocurrencies in banking institutions. Ripple’s Chief Legal Officer (CLO) Stuart Alderoty praised this move, emphasizing it as a significant victory. Alderoty had been characterizing this move by the SEC as an “unauthorized overreach” by SEC Chairman Gary Gensler.
“Crypto Mom” Criticizes SEC’s Inconsistent Approach
The vote resulted in the cancellation of this rule, known as SAB 121, which would have forced banks to include their customers’ crypto assets in their balance sheets. This obligation drew reactions from both the banking sector and the crypto industry. Experts said that this rule would significantly complicate custodial services. They also argued that the volatile nature of cryptocurrencies would negatively impact banks’ financial statements. Industry leaders, including MicroStrategy co-founder Michael Saylor, emphasized the need to protect the rights of crypto owners and expressed their approval of the Senate’s decision. SEC Commissioner Hester Peirce, often referred to as “Crypto Mom” for her positive attitude towards digital assets, criticized the institution’s inconsistent approach to regulating custodial services for digital assets.
Ripple CLO Highlights Bipartisan Support
Stuart Alderoty pointed out the importance of bipartisan support in legislative efforts affecting the crypto sector. The recent vote demonstrates the need for a balanced approach to the regulation of digital assets, reflecting an increasing consensus among US lawmakers. This unity is crucial as the industry seeks to positively influence future legislation, especially with the eagerly anticipated stablecoin bill still on the table.
Conclusion
The Senate’s decision to block the SEC’s rule is seen as a preventive measure against potential overregulation. Critics argued that this rule would deter innovation and violate digital asset ownership rights. This legislative action points to a more measured and informed approach to cryptocurrency regulation, which Ripple CLO Alderoty believes will support the growth and mainstream acceptance of cryptocurrencies.
