As a researcher with a background in finance and experience following the regulatory landscape of digital assets, I’m thrilled to see the US Senate taking a stand against the Securities and Exchange Commission (SEC) regarding the controversial SAB 121 rule. This proposed regulation threatened to mandate banks to include their customers’ cryptocurrency holdings on their balance sheets, potentially complicating matters for both the banking sector and crypto industry.
Stuart Alderoty, the Chief Legal Officer of Ripple, has expressed appreciation towards the US Senate for their decision to challenge the Securities and Exchange Commission (SEC) over a controversial proposed rule perceived as unfavorable to cryptocurrencies.
The US Securities and Exchange Commission (SEC) had proposed a contentious regulation that could have prevented regulated financial institutions from providing custody services for cryptocurrencies. However, the Senate recently overturned this regulation after a coalition of 12 Democrats and 49 Republicans cast their votes against the SEC’s Staff Accounting Bulletin 121 on Thursday.
Although President Joe Biden still has the option to reject the Senate’s action, Alderoty has praised this development, referring to it as a triumph against SEC Chair Gary Gensler’s alleged overreach without proper authorization.
As a researcher studying the regulatory landscape of cryptocurrencies, I have come across a consensus point between proponents of Decentralized Finance (D’s) and Regulatory bodies (R’s): Intolerance towards Gensler’s unauthorized overreach in the crypto sphere.
— Stuart Alderoty (@s_alderoty) May 16, 2024
SAB 121, Biden’s Influence
The contested regulation, referred to as SAB 121, aimed to compel banks to report their customers’ cryptocurrency assets on their financial statements. However, this directive sparked significant opposition from both the banking sector and the crypto industry. Their primary concerns centered around the complexities the rule would introduce, particularly with regard to custodial services. Additionally, banks voiced apprehensions that the unpredictable nature of cryptocurrencies could negatively impact their financial reports.
As a researcher studying current political events, I can share that the Biden administration has expressed firm opposition towards the Senate’s resolution regarding the removal of the Securities and Exchange Commission (SEC) rule on cryptocurrencies. According to a White House statement, eliminating this rule through the Senate’s means would hinder the SEC’s efforts to shield investors in crypto markets and maintain the stability of the larger financial system.
As an analyst, I would say that despite this statement, the crypto community and the banking sector might still express some apprehension rather than outright relief.
Growing Bipartisan Support for Crypto Regulation
It’s noteworthy that collaborative initiatives between Democrats and Republicans are emerging in the cryptocurrency sector. This was highlighted by Alderoty in his post on X, where he underscored the significance of bipartisan cooperation in shaping regulatory approaches to crypto.
The Senate passed the motion to repeal SAB 121 with a vote of 60 in favor and 38 against. This indicates that US legislators are starting to reach a consensus on implementing equitable regulations for digital assets.
The harmony among various crypto industry players could significantly shape upcoming laws, potentially benefiting stablecoin legislation and the crypto sector as a whole.
Other notable figures in the industry, including MicroStrategy’s co-founder Michael Saylor and SEC Commissioner Hester Peirce, commonly referred to as “Crypto Mom,” have voiced their agreement with the Senate’s decision. Saylor emphasized the importance of upholding the rights of cryptocurrency holders, while Pierce criticized the SEC for its inconsistency.
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2024-05-17 11:12