SEC Commissioner Mark Uyeda is advocating for the withdrawal of Staff Accounting Bulletin 121 (SAB 121), which provides guidelines for accounting crypto liabilities. Uyeda argues that the method of its issuance undermines the checks and balances designed 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. He criticized the release of the bulletin as a regulatory edict instead of following the standard rulemaking protocol under the Administrative Procedure Act (APA), which ensures transparency and allows for public input and judicial review. He believes that issuing SAB 121 as a regulatory edict avoids judicial review and undermines the system of checks and balances.
There are concerns that SAB 121 might discourage financial institutions from offering custodial services for cryptocurrencies due to the stringent 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, specifically addressing the recognition and valuation of liabilities incurred by companies holding these assets on behalf of their clients. It mandates that these liabilities be reported at fair value.
Commissioner Uyeda expressed disappointment in President Biden's veto of the resolution to overturn SAB 121. He believes that SAB 121 should be withdrawn.
What are your thoughts on Commissioner Uyeda's critique of the issuance of SAB 121? Do you think SAB 121 should be withdrawn? Let us know in the comments section below.