– The Government Accountability Office (GAO) says SEC guidance on accounting for holding crypto needs to be approved by Congress before becoming effective.
– The SEC’s Staff Accounting Bulletin No. 121 (SAB 121) requires firms to record customer crypto holdings as liabilities on their balance sheets.
– The Congressional Review Act (CRA) requires agencies to submit a report on a rule to Congress before it can go into effect.
– Congress can review and disapprove the rules within a 60-day period.
– The SEC argues that the bulletin is not subject to the CRA.
– The bulletin has faced pushback from crypto advocates and bipartisan lawmakers.
– Crypto industry representatives believe the SEC broke the law and call for the withdrawal of SAB 121.
– The SEC has not responded to the GAO’s statement.
The Securities and Exchange Commission’s (SEC) guidance on how firms should account for holding cryptocurrencies needs to be reviewed and approved by Congress before it can take effect, according to the Government Accountability Office (GAO). The guidance, known as Staff Accounting Bulletin No. 121 (SAB 121), requires firms to record customer crypto holdings as liabilities on their balance sheets. However, the GAO stated that the bulletin is subject to the Congressional Review Act (CRA), which mandates that agencies submit a report on the rule to Congress before it can be implemented. Under the CRA, Congress would have 60 days to review and disapprove the rule. The SEC had argued that the bulletin was not subject to the CRA, but the GAO disagreed. The guidance has faced criticism from crypto advocates and lawmakers, with some disputing the requirement to list custodial assets as liabilities. The Chamber of Digital Commerce and other industry representatives welcomed the GAO’s decision and called on the SEC to withdraw the guidance.
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