TechFlow news: The Government Accountability Office (GAO) said that the Securities and Exchange Commission's (SEC) guidance on how companies should account for holding cryptocurrencies must first be submitted to Congress before it can take effect, as required by law.
SEC's Staff Accounting Bulletin No. 121 (SAB 121), issued in March 2022, requires financial institutions holding customers' crypto assets to include those assets on their balance sheets.
The congressional oversight body said Tuesday that the bulletin is subject to the Congressional Review Act (CRA), which mandates that agencies submit a report on a rule to Congress before it becomes effective. Enacted in 1996, the CRA aims to strengthen congressional oversight of agency rulemaking. According to GAO, Congress would then have 60 days to review and potentially disapprove the rule.
"We conclude that the bulletin is a rule within the meaning of the CRA because it meets the definition of a rule under the Administrative Procedure Act (APA), with no applicable exception," GAO said Tuesday. "Therefore, the bulletin must be submitted to Congress."
The SEC has argued that the bulletin is not subject to the CRA because, according to the SEC, it does not meet the definition of a rule, GAO noted.
