Crypto United States: Soon on Capitol Hill?

Some time ago, the United States Securities and Exchange Commission set accounting guidelines for cryptos. These rules, which aim to clarify the accounting treatment of digital assets, came into force in April 2022. They also constitute the “Staff Accounting Bulletin (SAB) 121”. But, according to Sen. Cynthia Lummis and Rep. Patrick McHenry, the guidelines are an affront to the new industry. The two lawmakers suggested as much in a letter to heads of different regulatory bodies. These include the Federal Reserve System and the Office of the Comptroller of the Currency. There is also the Federal Deposit Insurance Corporation and the National Credit Union Administration. Discover the content of the letter from Cynthia Lummis and Patrick McHenry.

Guidelines that put crypto customers at risk

Last month, the SEC was lambasted for its approach to stablecoins. On March 2, he was accused of having proposed accounting guidelines that endanger the rise of the crypto sector. Indeed, US lawmakers Cynthia Lummis and Patrick McHenry say the SEC’s accounting policy is dangerous. They indicated that the rules it includes can cause the loss of assets of crypto customers.

In fact, the SEC accounting guidelines place a restriction on financial companies holding their clients’ cryptos. Companies are required to recognize as a liability all digital assets that they do not control. Additionally, the rules call for cryptos to be backed by a backing asset.

The senator announces her position

According to the two American lawmakers, these directives could discourage regulated entities from offering crypto custody services. Cynthia Lummis and Patrick McHenry have declared that the American regulator should nevertheless seek to promote the opposite effect.

In their letter, they explained:SAB 121 puts client assets at greater risk of loss if a custodian becomes insolvent or goes into receivership, violating the SEC’s core mission to protect clients“.

US lawmakers Cynthia Lummis and Patrick McHenry find SAB 121 will prevent millions of Americans from keeping their cryptos safe. Moreover, they are againstthe breadth of the definition of the term “digital asset” in SAB 121“. They argue that it shoulda more nuanced hierarchy for this asset class that takes into account the opportunities and risks of digital assets with different functions“.

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