In a surprise bipartisan move on Thursday, the U.S Senate voted to repeal SEC’s controversial SAB 121 policy. The SAB 121, an acronym for Staff Accounting Bulletin 121, is a policy by the SEC that critics viewed as a deterrence to investment banks from large-scale crypto custody services.against such a move, claiming that it could constrain the SEC’s ability to protect crypto investors. The statement also said that President Joe Biden would use his veto if the need arose.
“The threat of a presidential veto denies the fact that there is a growing awareness among the voting public, particularly young people, that crypto is something our elected officials should care about.”the controversial SAB 121 guidance two years ago . It instructed entities safeguarding crypto assets on behalf of others to include the assets in their balance sheets.
This was contrary to traditional stocks held by the same custody entities, meaning that crypto assets would be treated differently. Apart from the need for high capital reserves to cushion against a risky balance sheet, the uncertainty from SAB 121 tipped Nasdaq and Industry players have long voiced potential risks associated with Coinbase’s dominance in the crypto-custody sector. Notably, Coinbase is the custodian for 8 out of the 11 US spot BTC ETF issuers. Hence, some believe repealing SAB 121 could help mitigate the risks associated with a single-point of failure.
“U.S lawmakers want to foster sensible development of crypto in the U.S. Not some lawmakers. The majority. 2024 is the beginning of the mainstream era.”Benjamin is a Telecommunication Engineering graduate who is passionate about crypto-markets and unraveling market trends. Armed with charts and patterns, he's interested in making the intricate, complex landscape of digital assets more palatable for every user.Subscribe to get it daily in your inbox.
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