Providing for Congressional Disapproval of the Rule Submitted By the Securities and Exchange Commission Relating to ``Staff Accounting Bulletin No.

Floor Speech

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Mr. LYNCH. Mr. Speaker, I rise in strong opposition to H.J. Res. 109.

This misguided resolution would eliminate the Securities and Exchange Commission's Staff Accounting Bulletin 121. This nonbinding, interpretive guidance advises companies that are holding crypto assets in custody for customers to record those assets as liabilities on their balance sheets. It also recommends that companies disclose the nature and the amount of their crypto-asset holdings. Simply put, it advises caution and transparency regarding crypto because it is so volatile.

The disapproval of SAB 121 would have severe consequences in the U.S. financial services industry and be especially dangerous for banks, depositors, investors, and consumers. As underscored in the bulletin, the safeguarding of crypto assets presents unique technological, regulatory, and legal risks that could significantly impact a company's financial condition and its operations. For this same reason, the bulletin seeks to ensure that investors are informed about these risks in making investment and other capital allocation decisions.

The failure of Silicon Valley Bank, Signature Bank, First Republic Bank, and others have shown us that nervous depositors can cause a run on bank assets when crypto assets become unstable. They can also move money in the blink of an eye, which makes these banks less stable and subject to failure.

With the collapse of FTX, the violation of Federal anti-money laundering and sanctions laws by Binance, and legal issues facing several other crypto companies, Staff Accounting Bulletin 121 serves to protect investors.

Crypto is now in its 17th year, yet the primary use cases for crypto continue to be money laundering, tax avoidance, cybercriminal ransomware payments, and terrorist finance.

Regrettably, crypto has become a truly perfect example of a textbook case of an elegant idea that is being continually savaged by an ugly gang of facts.

Regrettably, the Republican leadership's efforts to curtail SEC regulation in the crypto sector are now even extending to staff bulletins that are simply advisory and designed to publicize staff views regarding accounting-related disclosure practices.

This resolution also undermines the practice of issuing Staff Accounting Bulletins for the benefit of small investors and firms that may not have the resources to engage directly with the SEC and obtain an individual opinion or advice.

As ranking member of the Digital Assets Subcommittee for the House Financial Services Committee, I urge my colleagues to vote ``no.''

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