Democrat Nickel has criticized the US Securities and Exchange Commission (SEC) and its chairman Gary Gensler for their approach to regulating cryptocurrencies, believing the regulator is turning the issue into a "political soccer." In his May 15 letter, Nickel raised concerns about the proposed SAB 121 rule, which he believes is contrary to the SEC's mission to protect investors and beyond its authority.
SAB 121, or Staff Accounting Bulletin 121, would require SEC-reporting companies that hold #cryptocurrencies to record those assets as liabilities on their balance sheets. According to Nickel, this would result in U. S. banks being unable to store cryptocurrencies on a large scale, which in turn would create "concentration risk" by transferring more control to non-banks. He believes that such "open hostility" by the SEC towards the #cryptocurrency industry is against the interests of President #Joe Biden and forces him to take sides on an issue that is important to many Americans.
The North Carolina representative also expressed confidence that the Senate will pass a resolution invalidating the SEC's proposed rule. He hopes that this bipartisan resolution, supported by both chambers, will send a clear message to the SEC to adjust its approach to regulating #digital assets.
Last week, the House of Representatives already voted to pass a bill repealing SAB 121. Now the floor is up to Biden, who has previously stated his intention to veto the bill.
Nickel and many Republicans, including U. S. Representative Tom Emmer, are concerned that SAB 121 could lead to negative consequences for U. S. investors and markets. They believe the rule will make markets "less fair, less orderly and less efficient" and could lead investors to seek offshore custody solutions that may be riskier in the long run.
The SEC's mission, as defined by its statute, is to protect investors, promote capital formation and maintain fair, orderly and efficient markets. However, according to Nickel and his supporters, the SEC's approach to regulating cryptocurrencies runs counter to these goals and needs to be adjusted.
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