Senator Cynthia Lummis is urging the Senate to follow the U.S. House of Representatives in overturning the SEC’s Staff Accounting Bulletin 121 (SAB 121). The resolution aims to prevent excessive regulation that hinders financial institutions from holding customers’ digital assets. Critics, including House Financial Services Committee Chair Patrick McHenry, argue that SAB 121 exemplifies regulatory overreach under SEC Chair Gary Gensler.
In a statement on social media platform X, Senator Lummis praised the House’s decision and called for swift action in the Senate. She emphasized the importance of not allowing the administration to regulate financial freedom tools out of existence. Senator Lummis stated, “Time for the Senate to swiftly overturn this misguided rule.”
The resolution to nullify the SEC’s rules under SAB 121 was successfully passed by 21 Democrats and 207 Republicans in the House. Representative Warren Davidson expressed gratitude for the bipartisan support and hoped that it would pave the way for future work on issues such as banning central bank digital currency, protecting self-custody, defining market structure, and properly recognizing stablecoins.
House Financial Services Committee Chair Patrick McHenry criticized SAB 121 as an example of regulatory overreach under SEC Chair Gary Gensler. He explained that the rule makes it costly for financial institutions to hold customers’ digital assets on their balance sheets. McHenry believes that the resolution passed by the House will allow consumers to safely hold their digital assets through highly regulated banks and financial institutions.
Representative Tom Emmer also expressed concern about the SEC under Gary Gensler’s leadership. He cosponsored three pieces of legislation aimed at reforming the SEC’s processes, increasing transparency to Congress, and improving cybersecurity. Emmer believes that these reforms are necessary to bring the SEC back on track to fulfill its statutory mission.
The White House, however, has issued a statement in support of the SEC, indicating that President Joe Biden would veto the resolution if presented to him.
The approval of the resolution to overturn the SEC’s crypto rules now rests with the Senate. The outcome of this decision remains to be seen.
