Members of Congress urge financial authorities to abolish the SEC's SAB 121 regulation, stating that financial institutions holding customer crypto assets should not include them on their balance sheets

ChainCatcher news, according to Cointelegraph, lawmakers have submitted a memorandum urging key financial authorities, including the Chairman of the Federal Deposit Insurance Corporation Board and the Acting Comptroller of the Currency, to provide guidance or take action to clarify that the SEC Staff Accounting Bulletin No. 121 (SAB 121) is unenforceable following a recent decision by the Government Accountability Office (GAO).

Lawmakers pointed out in the document that SAB 121 should not have legal effect, and that federal banking agencies and the National Credit Union Administration should not require banks, credit unions, and other financial institutions that provide custody services for digital assets to comply.

It is reported that SAB 121 stipulates that cryptocurrency assets of bank customers should be held on the bank's balance sheet to reflect the value of the assets and requires maintaining capital against these assets. Industry insiders and Republican lawmakers believe that the regulation jeopardizes the willingness of regulated banks to act as custodians for cryptocurrencies, and that its treatment of cryptocurrency holdings is different from that of other assets.