Senator Warren Supports SEC’s Crypto-Related Accounting Guidance at Senate Hearing

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Elizabeth Warren Expresses Support for SEC’s SAB 121

During a Senate hearing on May 16, 2024, Senator Elizabeth Warren articulated pronounced support for the Staff Accounting Bulletin (SAB) 121, proposed by the United States Securities and Exchange Commission (SEC). This bulletin is of particular interest to corporations involved in cryptocurrency transactions. Warren proposes that the primary aim of SAB 121 is to offer companies sound fiscal guidance concerning virtual currencies.

According to Warren, SAB 121 exclusively elucidates how companies should take into account the uncertainties associated with cryptocurrencies and subsequently, render these risks evident in their disclosures. Relevant uncertainties under consideration include potential security breaches, theft, and the potential loss of digital currency in the event of a crypto safeguarding company filing for bankruptcy.

“The vote today is aimed at ensuring that the SEC can offer guidance conducive to aiding companies in generating robust, consistent, timely, and meaningful accounting disclosures,” Warren stated.

Contradicting Views on the Reasoning of SAB 121

Warren’s advocacy for the bulletin emphasized that it does not necessitate cryptocurrency platforms to incorporate customers’ cryptocurrencies into their financial statements. This view is, however, startlingly at odds with a prior assertion by the Chairman for the House Financial Services Committee, Patrick McHenry, who stated that the bill enforces financial entities safeguarding customers’ digital assets to include these assets in their balance sheet. However, Warren contends that SAB 121, in no way, absolves a cryptocurrency platform of ownership of its customers’ digital assets.

Disapproval of the Senate Vote

In the presage of a Senate vote on HJ Res. 109, which held the capacity to annul SAB 121, Warren made her objections known. She took a firm stand against the idea of the vote itself:

“We ought not to be holding this voting session. That reason alone is quite sufficient to justify a negative vote.”

She articulated that given the fact that the SEC released its bulletin well over a two-year period ago, the current vote, in essence, falls notably beyond the time frame allowable for congressional assessment. Furthermore, Warren asserted that the issue is highly beyond the spectrum of the jurisdiction of the Congressional Review Act (CRA). She believes that the bulletin, being neither a notice nor a comment rule, is therefore exempt from CRA’s purview. She also maintained that staff bulletins such as these do not possess the force of law.

Cra’s Determination

In stark contrast to Warren’s opinions, the US Government Accountability Office (GAO) previously determined SAB 121 to be suitably considered a rule for intents and purposes of the CRA in October, a year prior.

Expectation of Presidential Veto amid Senate Decision

A significant majority of the Senate made a decision to overturn SAB 121 on May 16, subsequent to the House of Representatives’ vote to advance HJ Res. 109 on May 8. Presently, there is widespread expectation of a Presidential veto from Joe Biden. The Senate vote failed to produce an adequate majority to circumvent the impending veto. Biden is obligated to veto the bill within a timeline of 10 days from its reception on his desk.

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About Post Author

Chris Jones

Hey there! 👋 I'm Chris, 34 yo from Toronto (CA), I'm a journalist with a PhD in journalism and mass communication. For 5 years, I worked for some local publications as an envoy and reporter. Today, I work as 'content publisher' for InformOverload. 📰🌐 Passionate about global news, I cover a wide range of topics including technology, business, healthcare, sports, finance, and more. If you want to know more or interact with me, visit my social channels, or send me a message.
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