SEC Softens SAB121 Stance, Critics Unimpressed

One eyebrow raising regulatory event was swept underneath the headlines this week, highlighting the political absurdity behind the SEC...

In what was viewed as a big bummer from industry proponents, the House recently failed to overturn President Biden’s veto on the crypto accounting policy SAB 121.

• What this means: The controversial accounting guidance will remain in force, preventing banks in the US from providing crypto custody services… which, essentially, holds the industry back and even hurts consumers.

SEC Slightly Pivots

After the failed overturn attempt, the SEC then tried to become the good guys by “relaxing” their stance on the matter. Bloomberg Tax reported the SEC would allow some exceptions, opening a path for banks and brokerages to bypass controversial crypto accounting guidance.

Is it better than nothing? Sure. But critics argue the final outcome is even worse. And we tend to agree…

Instead of repealing SAB 121, or working with Congress or banking regulators to amend it, the SEC has essentially decided to approve individual firms on an ad hoc basis.

In other words, after all of the drama and bipartisan support against this bill to begin with, the SEC will now get to go above the law… give one-off green-lights behind closed-doors… and pick and choose its own winner-and-losers.

Welcome to America, I guess – where we implement dumb policies our authorities don’t even follow and use only to yield more control.