House Committee Votes to Repeal SEC's Crypto Custody Rule

The House Financial Services Committee has passed a resolution to overturn the SEC's Staff Accounting Bill 121, citing procedural concerns and the need for clearer regulatory guidance.

The resolution to repeal SAB 121 passed with bipartisan support, highlighting concerns over the SEC's process and the impact on banks' ability to custody digital assets.
Critics argue that SAB 121, which requires crypto custodians to report assets as liabilities, adds necessary consumer protection against fraud and mishandling.
The move reflects growing pressure from lawmakers on the SEC to adjust its oversight of the crypto industry, amid claims of regulatory overreach.
State attorneys general have also challenged the SEC's authority over crypto firms, emphasizing the need for clearer rules and the potential risks of current regulatory approaches.
The resolution must pass a full House and Senate vote before SAB 121 can be officially discarded, with ongoing debates about the balance between innovation and investor protection.