Sen. Cynthia Lummis (R-Wyo.) has expressed her disapproval of the Securities and Exchange Commission’s (SEC) crackdown on the cryptocurrency industry. She is now vowing to block one of the agency’s controversial crypto policies.
During a Yahoo Finance interview, Lummis said, “I think the SEC is overreaching.” The SEC has been taking a strong stance on the crypto industry in a number of areas, with litigation against Coinbase and Binance among others.
The SEC issued the policy guidance, termed “Staff Accounting Bulletin 121” in March 2022. The policy requires firms holding customers’ crypto assets to do so on their own balance sheets, while also warning investors of the risks involved. However, the Government Accountability Office (GAO) noted that the SEC should have sent the policy guidance to Congress for approval.
Lummis is determined to stop this policy from becoming binding, citing it as a case of overreach by the SEC. She believes she will gain support from both the Senate and the House in the weeks to come. According to her, the bulletin could be harmful to consumers if a digital asset custodian were to collapse. “It’s not a common-sense rule,” Lummis said in an interview with Yahoo Finance Live. “It was issued as a staff bulletin, but the bulletin is binding.”
To provide more clarity in Washington for the crypto industry, Lummis is working on a sprawling piece of crypto legislation with Sen. Kirsten Gillibrand (D-N.Y.), which will outline the sector’s regulation. She is hopeful that the legislation could pass in early 2024 and is open to incorporating certain sections into other legislative packages.
In fact, a portion of her bill dealing with terrorist financing was recently included in the Senate’s defense spending package, or National Defense Authorization Act. Lummis believes this will be beneficial, citing the concerns that Hamas is using cryptocurrency to finance its attacks on Israeli civilians and military personnel.
Additionally, Lummis supports the House Financial Services Committee’s crypto framework led by Committee Chair Patrick McHenry (R-N.C.). She is hopeful that she and McHenry can iron out the small differences between the House and Senate versions related to stablecoins and put something out before the end of the year.
“We’re crying out for a clear regulatory framework here,” said Lummis.