- The SEC recently issued a controversial accounting bulletin requiring firms that custody crypto to record customer holdings as liabilities, sparking criticism for avoiding standard rulemaking procedures.
- Lawmakers like Rep. McHenry and Sen. Lummis have voiced concerns that the bulletin imposes massive new requirements without input from regulators or the public.
- The GAO said the SEC must submit the bulletin to Congress under the Congressional Review Act before it can take effect, giving Congress a chance to review and potentially block the rule.
The SEC recently issued a controversial accounting bulletin regarding cryptocurrency holdings that is now facing criticism from lawmakers. The bulletin requires firms that custody crypto to record customer holdings as liabilities, but some say the SEC overstepped its authority.
SEC Defends Crypto Accounting Bulletin
SEC Chair Gary Gensler defended the accounting bulletin, arguing it is needed to protect investors in cases like the Celsius bankruptcy. However, the bulletin was issued without input from regulators or the public.
Lawmakers Voice Concerns Over Crypto Accounting Rules
Rep. Patrick McHenry said the bulletin would impose “massive new requirements” on institutions and deter crypto custody services. Sen. Cynthia Lummis said the bulletin should have gone through proper rulemaking procedures. Rep. Wiley Nickel criticized the SEC’s “disregard for the statutorily required processes.”
GAO Deals Blow to Controversial SEC Bulletin
The Government Accountability Office (GAO) said the SEC must submit the bulletin to Congress under the Congressional Review Act before it can take effect. This gives Congress the chance to review and potentially block the rule.
Conclusion
The SEC’s crypto accounting bulletin sparked backlash for avoiding standard rulemaking procedures. Now the GAO has stepped in, forcing the SEC to give Congress a say. The fate of the controversial bulletin remains uncertain amid ongoing criticism.
