Emmer Calls Out Gensler for SAB 121 Rule Enforcement

Emmer didn’t hold back, asserting that Gensler’s actions demonstrated a bias against digital assets and exceeded the SEC’s authority. He emphasized that the SEC’s imposition of SAB 121, disguised as guidance, effectively restricted banks from displaying custody services, leading to detrimental effects on the crypto market.

During a House Committee meeting, Emmer highlighted the adverse impact of Gensler’s actions, particularly on the concentration risk within the crypto ecosystem. He pointed out that the rulemaking under SAB 121, which has been in effect for two years, introduced unnecessary risks and disorderliness into the crypto market, ultimately harming investors.

Emmer further raised concerns about the implications of SAB 121 on recently launched Spot Bitcoin ETFs, noting that none of the approved ETFs have bank custodians, which he deemed risky. He argued that SAB 121 weakens investor protection by forcing them to rely on less regulated entities for custodial services.

In response to these concerns, the House Financial Services Committee voted on advancing a resolution to revoke SAB 121. Introduced by committee members Mike Flood and Wiley Nickel, the resolution aims to repeal the SEC’s mandate regarding digital asset custodians’ reporting requirements. Critics of SAB 121 argue that it should have undergone a formal rulemaking process, citing oversight issues and lack of consultation with relevant regulatory experts.

However, opponents of the resolution, including Rep. Maxine Waters, defended SAB 121, emphasizing its role in protecting investors from potential mishandling of crypto assets by custodians. Despite the ongoing debate, the resolution represents a significant effort to challenge the SEC’s regulatory approach to digital assets and custodial practices.