The American Bankers Association (ABA) lobbies against the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121 (SAB 121). It was discovered that the ABA wrote a letter to President Joe Biden, urging him to sign the Congressional Review Act resolution(H.J Res.109) of disapproval for SAB 121, into law before the President vetoed the bill.
Lawmakers Senator Cynthia Lummis, Rep. Mike Flood, and Rep. Wiley Nickel STARTED the bill H. J. Res. 109 to repeal SAB 121. The ABA, and other financial associations, expressed their support for H.J. Res. 109 in the report to Biden.
ABA highlighted that SAB 121, which requires public companies to record the fair value of user-safeguarded digital assets on their balance sheets, deviates from the normal accounting treatment of custodial assets as off-balance sheet assets.
This means that the activity of digital asset custody is impossible for regulated banking organizations to scale up because they have to meet higher requirements in terms of capital or liquidity than their non-banking counterparts.
They argued that they were focused on the client which they underlined saying that the limitation of the possibility for banks to perform these services puts customers in scarce trustworthy means of protecting their digital assets. The contributors to the field of cryptocurrencies have lamented the move that saw H. J. Res. 109 vetoed.
Lightspark Co-founder and CLO, Jai Massari criticized Joe Biden for vetoing SAB121, stating that it is against consumer protection, changes in crypto policy, and competition. She explained that SAB 121 regulated financial institutions from handling digital asset custody despite lacking suitable backing.
