2024

Bitcoin ETF

Bitcoin

The United States House Financial Services Committee (HSFC) has voted in favor of a resolution that seeks to overturn a U.S. Securities and Exchange Commission guideline that has prevented banks from getting in on crypto custody.
In a Feb. 29 markup <a href="https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=409163" target="_blank" rel="noopener nofollow">hearing</a>, 31 HSFC members from both sides of the political aisle voted in favor of the resolution, with 20 members voting against it.
“By overturning SAB 121, the Resolution will ensure consumers are protected by removing roadblocks that prevent highly regulated banks from acting as custodians of digital assets,”&nbsp;<a href="https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=409163" target="_blank" rel="noopener nofollow">said</a> the House Financial Services Committee in a statement.
The SEC’s Staff Accounting Bulletin No. 121 — introduced in March 2022 — is a set of guidelines that requires institutions that custody crypto assets to record crypto holdings as liabilities on their balance sheets. 
Republican Congressperson Mike Flood, the lawmaker who introduced the resolution, said that the SAB 121 was unfair for banks looking to custody crypto, as custodial assets are “always considered off-balance sheet,” which includes securities and digital assets, such as Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>). 
<blockquote data-ct-non-breakable="true">
 “The ramifications of requiring banks to hold these assets on-balance sheet are pretty significant.”
</blockquote>
“If a bank were to custody digital assets according to the parameters of SAB 121, the on-balance sheet treatment would affect their other regulatory obligations like their capital and liquidity requirements,” Flood added.
The resolution was introduced on Feb. 1 by Flood and Democrat Representative Wiley Nickel, who said that SAB 121 went “beyond the scope of an accounting bulletin” and had effectively become a de facto law. 
<blockquote class="twitter-tweet">
 There is bipartisan agreement SAB 121 undermines consumer protection and leaves customers' digital assets vulnerable. I look forward to getting this measure across the finish line to overturn it. Thanks to <a href="https://twitter.com/USRepMikeFlood?ref_src=twsrc%5Etfw">@USRepMikeFlood</a>, <a href="https://twitter.com/RepWileyNickel?ref_src=twsrc%5Etfw">@RepWileyNickel</a>, and <a href="https://twitter.com/SenLummis?ref_src=twsrc%5Etfw">@SenLummis</a> for your leadership. <a href="https://t.co/otlpBnnMWW">https://t.co/otlpBnnMWW</a>— Patrick McHenry (@PatrickMcHenry) <a href="https://twitter.com/PatrickMcHenry/status/1753163536635736451?ref_src=twsrc%5Etfw">February 1, 2024</a>
</blockquote> 
Notably, the resolution still needs to pass a full floor vote in the House and the Senate before SAB 121 is thrown out. 
Speaking at the markup hearing, crypto-friendly Republican Congressperson Tom Emmer said that SAB 121 was an “illegal” example of SEC Char Gary Gensler’s “unrelenting prejudice towards the digital asset ecosystem.”
Related: <a href="https://cointelegraph.com/news/sec-seeks-comments-bitwise-grayscale-bitcoin-etf-options">SEC seeks comments on Bitwise, Grayscale Bitcoin ETF options</a>
Emmer said SAB 121 introduced “unnecessary and avoidable” concentration risk into the crypto ecosystem. 
“The Bitcoin ETFs are a great example. Not a single bank provides the custodial services for any of the eleven approved ETFs. This is risky,” he added.&nbsp;
<blockquote class="twitter-tweet">
 .<a href="https://twitter.com/GaryGensler?ref_src=twsrc%5Etfw">@GaryGensler</a> is violating the SEC’s statutory mission with SAB 121. We must pass <a href="https://twitter.com/USRepMikeFlood?ref_src=twsrc%5Etfw">@USRepMikeFlood</a>'s resolution so Chair Gensler’s illegal rule ceases to be in effect. See my remarks on the resolution below. <a href="https://t.co/cn8HQV2cAb">pic.twitter.com/cn8HQV2cAb</a>— Tom Emmer (@GOPMajorityWhip) <a href="https://twitter.com/GOPMajorityWhip/status/1763250603705123024?ref_src=twsrc%5Etfw">February 29, 2024</a>
</blockquote> 
On the other hand, Democrat Congressperson Maxine Waters, one of the lawmakers who voted against the resolution, said that the move to rescind SAB 121 was an “ironic” move from crypto-friendly politicians. 
“We often hear Republicans and the crypto industry complain about a lack of clarity from the SEC, but ironically, the resolution before us effectively blocks the SEC staff from providing that clarity around crypto,” she said. 
SABs are not enforceable laws under the SEC’s purview. Instead, they are a series of non-binding guidelines used by SEC staff to help companies clarify how crypto firms should account for customer crypto holdings. 
SABs do not require public notice or comment periods like other more formal rules. 
Magazine: <a href="https://cointelegraph.com/magazine/crypto-inevitable-all-in-meet-vance-spencer/">‘Crypto is inevitable’ so we went ‘all in’ — Meet Vance Spencer, permabull</a>

US lawmakers advance resolution to get banks in on crypto custody

Cointelegraph

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