SEC Commissioner Hester Peirce condemns SAB 121 and criticizes her agency’s regulatory approach

At the two-day "SEC Speaks" event hosted by the Practising Law Institute, Hester Peirce, a commissioner of the US Securities and Exchange Commission (SEC), criticized Staff Accounting Bulletin 121 (also known as SAB 121) and criticized the regulatory approach of the institution.

SAB 121, released in March 2022, requires companies that custody cryptocurrencies to record customer-held cryptocurrencies as liabilities on their balance sheets. This announcement has been controversial over the past year as the crypto industry is concerned that it may prevent banks from custodying digital assets.

Hester Peirce also stated that when individuals and entities seek feedback, concerns, and questions from the SEC, they often encounter "silent responses." She said, "The root of the problem is that the Commission does not encourage staff to provide more than shrugs, silence, slow walking, and sighs when responding to questions. The culture at the top of the SEC has changed, leading to a change in the way the entire institution interacts with the public."