Senator Lummis, representing Wyoming, has adopted a resolute position in response to the SEC recent actions. She has expressed strong concerns about the SEC’s ongoing efforts, which are aimed at regulating the cryptocurrency sector.
In an interview with Yahoo Finance, Senator Cynthia Lummis articulated her concerns about the regulatory agency’s actions. During the interview, she also made a commitment to impede one of the SEC’s controversial new cryptocurrency policies.
“I firmly believe that the SEC is exceeding its authority,”
Fervently, the SEC has been pursuing assertive measures, which include initiating legal actions against prominent entities such as Coinbase and Binance. One specific policy introduced by the SEC in March 2022, named “Staff Accounting Bulletin 121,” has captured Senator Lummis’ attention.
This policy requires financial institutions holding customers’ cryptocurrency assets to include them in their financial reports. Additionally, they are required to issue warnings to investors regarding the potential risks associated with the custody of these assets.
Senator Lummis Fight Against SEC Policy and Cryptocurrency Legislation Efforts
However, the Government Accountability Office (GAO) has asserted that the SEC should have obtained Congressional approval for this policy guidance. In response, Senator Lummis is firmly committed to halting the implementation of this policy. She views it as a clear illustration of the SEC’s excessive exercise of authority.
She intends to garner support for her endeavors in both the Senate and the House in the coming weeks. Lummis is actively involved in crafting cryptocurrency legislation to enhance regulatory clarity in Washington.
She has co-sponsored extensive cryptocurrency legislation with Senator Kirsten Gillibrand (D-New York) to establish a regulatory framework for the sector.
“Senator Gillibrand and I have identified the minor discrepancies between the House and Senate versions, particularly regarding stablecoins, and we believe these can be resolved,”
“We anticipate that we will be able to reach a resolution on stablecoins, especially now that the House has a new speaker and is once again open for legislative work.”
Senator Lummis Cryptocurrency Legislation Initiatives and Stance on Regulatory Clarity
Senator Lummis is optimistic that this legislation will pass in early 2024 and is willing to integrate specific provisions into other legislative packages.
In recent weeks, a portion of Lummis’ bill addressing terrorist financing was included in the Senate’s defense spending package, known as the National Defense Authorization Act.
This legislation is currently under discussion and reconciliation with the House. Lummis asserts that such measures are vital, emphasizing concerns that organizations like Hamas exploit cryptocurrencies to support their operations.
The senator also expressed her support for the House Financial Services Committee’s cryptocurrency framework, led by Committee Chair Patrick McHenry (R-North Carolina).
She is content with whichever legislative body makes the most progress, underlining the significance of establishing a clear regulatory framework for the cryptocurrency industry. Furthermore, Democrats have raised concerns over the SEC’s approach to a controversial bulletin on companies’ cryptocurrency holdings accounting.
Congressional Concerns Surrounding SEC’s Bulletin and Cryptocurrency Custodial Services
Democratic representative Wiley Nickel from North Carolina expressed worries about the potential consequences of this bulletin, suggesting that it could jeopardize the security of digital assets. Moreover, several other members of Congress have also voiced their concerns about the bulletin.
Representative Patrick McHenry, who chairs the House Financial Services Committee, is a Republican from North Carolina. Notably, he holds the belief that the bulletin places substantial new obligations on financial institutions. He is concerned that these requirements may discourage them from providing custodial services.