In a hearing before the House Financial Services Committee, Gary Gensler, chairman of the United States Securities and Exchange Commission (SEC), faced criticism from lawmakers regarding the agency’s policies and actions. One particular area of contention focused on the SEC’s Staff Accounting Bulletin (SAB) 121, which addressed the accounting and disclosure of crypto assets held by public companies. Representative Mike Flood questioned Gensler about the lack of consultation with prudential regulators and the absence of guidance from the Financial Accounting Standards Board (FASB) before issuing the SAB. Flood argued that the SEC’s justification for the bulletin was based on accounting guidelines that did not exist at the time it was issued.
SAB 121, which requires the disclosure of risks associated with custodying digital assets, received opposition from various quarters. SEC Commissioner Hester Peirce and several senators raised concerns about the SAB being disguised regulation rather than staff guidance. Furthermore, four members of the Financial Services Committee sent a letter to Gensler urging him to approve spot Bitcoin exchange-traded funds, but this topic was not extensively discussed in the hearing.
During the hearing, Gensler also faced questions about the SEC’s handling of the Grayscale case and the agency’s stance on approving spot Bitcoin applications. Gensler acknowledged that the SEC is still considering the Grayscale case and assured committee members that the applications for spot Bitcoin were under active consideration. Overall, the hearing highlighted lawmakers’ criticism of the SEC’s actions and revealed concerns about the agency’s approach to regulating cryptocurrencies.
