US Government Calls SEC Actions In Cracking Down On Crypto Industry

The SEC's new crypto-related guidelines are being opposed by the US congress. (Photo; Doc. Grandpascrypto)

JAKARTA - The United States Government Accountability Office (GAO) recently expressed concern about the latest crypto regulations from the US Securities and Exchange Commission (SEC).

According to the office, the SEC appears to have missed a number of important steps in the process of issuing crypto guidance in SEC Staff Accounting Bulletin 121.

GAO assessed that the SEC did not comply with the provisions of the Congressional Review Act (CRA) because it did not submit reports to Congress and the Comptroller General. These rules require the SEC to submit reports to the House of Representatives, the Senate, and the Comptroller General before implementing any regulations.

A bulletin issued by the US Securities and Exchange Commission (SEC) in March 2022 regarding accounting for obligations related to securing crypto assets received harsh criticism from the crypto community and US lawmakers who support crypto.

The bulletin advised platforms such as Coinbase and PayPal to record user assets as liabilities and assets at their initial fair value, reported CryptoTimes. This guidance goes against previous practice, where assets did not appear on the balance sheet. This bulletin is also considered a staff interpretation and not the official views of the Commission.

Senator Cynthia Lummis, a prominent crypto advocate, requested an explanation from the SEC on the status of the bulletin. It sent a letter to the US Comptroller in August 2022, asking whether the newsletter should be subject to the Congressional Review Act (CRA).

The CRA mandates that reports regarding any agency's regulations must be submitted to both houses of Congress and the Comptroller General. The CRA also gives Congress the right to disapprove of the rule.

After conducting a thorough examination, the Government Accountability Office (GAO) determined that the bulletin met the regulatory definition in the Administrative Procedure Act (APA). According to GAO, the bulletin influences corporate behavior, has future effects, and aims to interpret and establish policy. Therefore, the newsletter is subject to the CRA.