While the future of blockchain glimmers with potential and positive implications, it must face an overwhelming series of regulatory hurdles. One such instance is the conflict surrounding the United States Securities and Exchange Commission (SEC) and its Chairman, Gary Gensler. The SEC’s recently published Staff Accounting Bulletin (SAB) 121, a guidance document detailing the accounting and disclosure requirements regarding crypto assets housed by public companies like Coinbase and Robinhood, has sparked notable criticism.
Labelled as ‘regulation disguised as staff guidance’ by its beauty of detractors, SAB 121 was issued in March 2022 without any prior consultation with key industry bodies. Notably absent from the discussion were the prudential regulators and the Financial Accounting Standards Board (FASB), a private entity whose task is to set guidelines aligned with Generally Accepted Accounting Principles (GAAP). Complicating matters, the FASB had only added digital asset accounting standards to its agenda in May 2022 – two months after SAB 121 was issued.
Adding to the outrage are persistent claims that no existing SEC rules directed towards the custody of digital assets were present at the time of the bulletin’s issuance. Gensler stands by SAB 121’s basis in older rules from 2009 regarding digital asset custody, but the panel continues to express skepticism over the validity of their justifications.
Against this backdrop, it seems that SAB 121 finds itself needing to clarify its essential purpose – assisting businesses in revealing the inherent risks tied to digital asset custody such as the legal, technological, and regulatory implications involved. These reservations reflect the general concern over the SEC’s handling of the burgeoning crypto space, predominantly its attention to allotting spot Bitcoin exchange-traded funds (ETFs) and the alleged lack of impartiality within Gensler’s financial strategies.
In conclusion, this unease underlines the inherent difficulty of regulating a rapidly evolving and complex industry like crypto. As proponents strive for innovation and financial freedom, the regulatory bodies grapple with the practical realities of protecting investors, ensuring market stability, and foiling nefarious activities. Despite the crypto community’s continued pushback, the SEC’s intense grip appears to remain unmoved – highlighting an ongoing saga that crypto enthusiasts and regulatory bodies alike shall find no easy solution to. This tug-of-war has, and will continue to cast a substantial impact on the aura of legitimacy and acceptance that surrounds the entire crypto space.
Source: Cointelegraph
