The post Crypto Mom Hester Peirce Backs Repeal of SAB 121, Calls it an Unnecessary Burden on Industry appeared on BitcoinEthereumNews.com.

SEC Commissioner Hester Peirce has acknowledged that the agency granted exemptions to specific entities to provide crypto custody services for Bitcoin and other cryptocurrencies, bypassing the restrictions imposed by SAB 121. Peirce disclosed this position during yesterday’s SEC hearing with the House Financial Services Committee. The Controversy Over SAB 121 For context, the SEC’s Staff Accounting Bulletin 121 (SAB 121) requires companies holding digital assets for customers to report them as liabilities on their balance sheets. This has sparked controversy, as it disrupts traditional accounting practices and adds financial burdens on companies offering crypto custody services. The crypto industry views this rule as regulatory overreach, arguing that it unnecessarily increases business costs and stifles innovation. Specifically, financial institutions have found it challenging to comply with SAB 121, as it complicates their ability to safely and affordably offer custody services for digital assets. Critics also highlight a lack of transparency from the SEC, particularly regarding exemptions from the rule, which has caused further confusion within the industry. Interestingly, SAB 121 has united both chambers of Congress, which passed legislation to overturn the rule in July. However, the bill was vetoed by President Biden. Nevertheless, U.S. lawmakers continue to push for the SEC to rescind SAB 121. They argue that it stifles the growth of the crypto sector while providing little benefit in terms of investor protection.  SEC Chairman Not Rescinding SAB 121 During the latest hearing, SEC Chairman Gary Gensler was specifically asked whether he would commit to rescinding SAB 121. He declined, asserting that it represents “good accounting.” Gensler’s main defense is that the rule pertains to the treatment of assets in bankruptcy. After multiple crypto bankruptcies, courts have classified certain assets as liabilities, which forms the basis of the accounting bulletin. Crypto Mom Agrees to Rescind SAB 121 In…

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Filed under: News - @ September 25, 2024 9:28 am