SEC failed to follow the Congressional Review Act, may have broken the law

The US Government Accountability Office found that the Securities and Exchange Commission did not follow the Congressional Review Act in issuing Staff Accounting Bulletin 121. 

SAB 121 was first issued back in March 2022. It said that the crypto assets of bank customers should be held on the balance sheet of the banks. But, GAO argues, it never should have been issued without Congressional review first due to it falling under the criteria of rule.

Before a rule can take effect under the CRA, the regulatory agency needs to file a report with the House of Representatives, the Senate and the Comptroller General.

The SEC initially issued it to provide “interpretive guidance.” However,…

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