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Senator Lummis Takes a Stand Against SEC’s Crypto Crackdown, Says the Commission is “Overreaching”

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Senator Cynthia Lummis (R-Wyo.) has voiced opposition to the Securities and Exchange Commission’s ongoing crackdown on the cryptocurrency industry.

In an interview with Yahoo Finance, she expressed her concerns about the regulatory agency’s actions and vowed to block one of its controversial new crypto policies.

“I think the SEC is overreaching,” she said.

The SEC has been pursuing aggressive measures, including lawsuits against major players like Coinbase and Binance.

One particular policy issued by the SEC in March 2022, known as “Staff Accounting Bulletin 121,” has caught Lummis’ attention.

The policy requires financial firms holding customers’ crypto assets to include them on their balance sheets while also warning investors about the risks involved in safeguarding those assets.

However, the Government Accountability Office (GAO) recently stated that the SEC should have sought congressional approval for this policy guidance.

Senator Lummis is now determined to prevent this policy from becoming binding, citing it as an example of the SEC’s overreach.

She aims to gather support for her efforts in the Senate and the House within the next few weeks.

Lummis argues that the bulletin could potentially harm consumers if a digital asset custodian were to collapse.

Lummis Works On a Number of Crypto Legislations

Lummis is actively working on multiple fronts to provide the crypto industry with more regulatory clarity in Washington.

She has co-sponsored a comprehensive piece of crypto legislation with Senator Kirsten Gillibrand (D-N.Y.), which aims to outline the sector’s regulatory framework.

“Sen. Gillibrand and I see the small differences between the House and the Senate versions specifically related to stablecoins and we know they’re resolvable,” she said.

“So I think we’re going to be able to get to a resolution on stablecoins now that the House has a new speaker and they’re again open for business.”

Lummis is hopeful that this legislation will pass in early 2024 and is open to incorporating 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 being discussed and reconciled with the House.

Lummis believes that such measures are crucial, highlighting the concerns that organizations like Hamas are using cryptocurrencies to support their activities.

The senator also expressed support for the House Financial Services Committee’s crypto framework, led by Committee Chair Patrick McHenry (R-N.C.).

She is content with whichever legislative body is able to make progress first, emphasizing the importance of reaching a clear regulatory framework for the crypto industry.

Democrats Criticize SEC Over Handling of Crypto Accounting Bulletin

Last week, Democratic lawmaker Representative Wiley Nickel from North Carolina criticized the SEC’s management of a controversial bulletin concerning the accounting of companies’ crypto holdings.

He voiced concerns about the potential repercussions of the bulletin, stating that it could undermine the safety of digital assets.

Several other members of Congress have also voiced concerns regarding the bulletin.

Representative Patrick McHenry, a Republican from North Carolina, and Chair of the House Financial Services Committee, has said he believes the bulletin imposes substantial new requirements on financial institutions and could discourage them from offering custodial services.