SEC Commissioner Mark Uyeda is calling for the withdrawal of Staff Accounting Bulletin 121 (SAB 121), a set of guidelines for accounting crypto liabilities. Uyeda argues that the method of issuing SAB 121 undermines the checks and balances in place to prevent excessive administrative control. Despite bipartisan support for repealing SAB 121, President Joe Biden vetoed the measure.
Uyeda expressed concerns about the procedural method used by the SEC to issue SAB 121. Instead of following the standard rulemaking protocol under the Administrative Procedure Act (APA), which allows for public input and transparency, SAB 121 was released as a regulatory edict. This method avoids judicial review, which Uyeda believes weakens the system of checks and balances against an over-reaching administrative state.
There are concerns that SAB 121 could discourage financial institutions from offering custodial services for cryptocurrencies due to the strict reporting requirements. In response, Congress passed a bipartisan resolution, H.J. Res. 109, to repeal SAB 121. However, President Biden vetoed the resolution, keeping SAB 121 in effect.
SAB 121 plays a crucial role in shaping the financial reporting standards for crypto assets. It focuses on the recognition and valuation of liabilities incurred by companies that hold these assets on behalf of their clients, requiring these liabilities to be reported at fair value.
Commissioner Uyeda expressed disappointment over President Biden’s veto of H.J. Res. 109 and believes that SAB 121 should be withdrawn.
What are your thoughts on Commissioner Uyeda’s critique of the issuance of SAB 121? Do you agree that SAB 121 should be withdrawn? Let us know in the comments section below.
