Amongst many White House announcements yesterday, Commissioner Mark Uyeda was appointed as acting Chair of the Securities and Exchange Commission (SEC). The President previously announced Paul Atkins as his pick for full time Chair, which will be subject to confirmation. While Commissioner Hester Peirce has a higher profile in the digital assets space and is referred to as ‘Crypto mom’, Commissioner Uyeda has voiced similar forceful views during the Gary Gensler era. One of the most contentious Gensler issues was the staff accounting bulletin SAB 121 which effectively blocked banks from providing digital asset custody, including for tokenized securities.
Of late the SEC has been granting some SAB 121 exceptions, but still required banks to clear every engagement with them. As we wrote previously,
“Imagine doing a sales pitch in which the caveat is always “we have to check with our regulator”. It makes it trickier to get the client to sign on the dotted line.
The Government Accountability Office (GAO) determined that SAB 121 warranted a Congressional review. Both the House and Senate voted to overturn it, but President Biden used a Presidential veto, so it remains.
Commissioner Uyeda’s position on SAB 121
Commissioner Uyeda has on multiple occasions stated that the SEC should withdraw SAB 121. So there’s a good chance that could happen very soon.
When President Biden exercised his veto in June 2024, Fox Business correspondent Eleanor Terrett asked Commissioner Uyeda for his views. He said, “Issuing SAB 121 by regulatory edict rather than rulemaking under the Administrative Procedure Act effectively avoids judicial review, which undercuts our system of checks and balances against an over-reaching administrative state. The veto of H.J Res. 109 was unfortunate. SAB 121 ought to be withdrawn.”
He repeated those views at an accounting conference in December. “It just gets issued and there is no commission vote on it, either,” he said. “It is a statement of the staff. And I think one of the things that needs to occur, given the huge impacts [that SAB 121’s] had, is that it needs to be with withdrawn,” the American Bankers Association (ABA) reported.
Commissioner Pham is acting CFTC Chair
In more positive news for digital assets, Commodity Futures Trading Commission (CFTC) Commissioner Pham has been elected as acting Chair of the CFTC by her fellow Commissioners. She has been overseeing the progress of the CFTC advisory subcommittee that is proposing the use of DLT and tokenized collateral as margin, without rule changes.
