The US Government Accountability Office (GAO) has ruled that the US Securities and Exchange Commission (SEC) acted unlawfully by instructing banks to include customers’ cryptocurrency holdings on their financial statements.
This pertains to Staff Accounting Bulletin 121, which the GAO argues should have followed the Congressional Review Act (CRA) procedures for new regulations. The GAO disagrees with the SEC’s claim that the bulletin provided “interpretive guidance” and insists it was an agency statement with future implications.
The GAO states that the bulletin’s publication on the SEC’s public-facing website indicated it was an agency statement. The bulletin is considered to have future effects, as it guides entities on handling cryptocurrency assets for clients in the future. This ruling suggests the SEC overstepped its regulatory authority in cryptocurrency matters.
Notably, SEC Commissioner Hester Peirce criticized the bulletin’s approach to cryptocurrency regulation as inefficient, while others see the GAO’s decision as evidence of the SEC‘s overreach.
Coinbase and traditional investment managers have also criticized the SEC’s actions in the cryptocurrency industry, with concerns about regulatory clarity and compliance burdens.
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