Janet Yellen, the Treasury Secretary, is expected to face the House Financial Services Committee on Tuesday and table legislation for discussion amid crypto risks. Yellen leads the FSOC (Financial Stability Oversight Council) and will do so while discussing the Council’s latest annual report.
The goal is to get clearance on the legislation. FSOC remains locked into the risks that the crypto sphere brings with it. She has previously cited the now-bankrupt FTX as a Lehman moment for the crypto market. There is no doubt that Janet will be fixated on that issue in the upcoming session.
Janet has said in her testimony that their focus is on digital assets and the risk they bring. These risks could be associated with crypto platforms or stablecoins, extending to vulnerabilities from crypto-asset price volatility. She has further stated in the testimony that the Council is also focused on the proliferation of platforms that are acting out of the laws and regulations.
FSOC continues to warn about the volatility in crypto prices. Another round of discussion will include talks about SAB 121. In March 2022, the US Securities & Exchange Commission issued it. The bulletin requires firms to record their customers’ holdings on the side of liabilities. Gary Gensler, the SEC Chair, has backed the bulletin by saying it relates to customer concerns.
Some who advocate the crypto space have called SAB 121 illogical, while others have said that it should have been previously an official rule. Sen. Cynthia Lummis, R-Wyo., and Reps. Mike Flood, R-Neb., and Wiley Nickel, D-N.C., have presented a joint resolution to the House Financial Services Committee to block the bulletin.
That said, the SEC is committed to taking on those who mislead a group of people to invest in risky funds. The last action taken by the Commission was against Brian Sewell for targeting their students and asking them to invest in hedge funds that don’t exist. Brian is the founder of the American Bitcoin Academy. Rockwell Capital Management, his firm, is also under scrutiny for fraud.
Brian had pitched the scheme to his students by telling them that funds would use AI to generate returns.
The crypto space is on the road to recovery, with BTC and ETH leading the charge. Both tokens were above $43,000 and $2,300 at the time of writing this piece. Sustaining those marks for a longer time would open the doors to a higher milestone. The approval of Spot Bitcoin ETF has not precisely played out the way it was supposed to, but that has ensured that other cryptos come under the limelight with their respective ETF applications.
Interestingly, the development will only sharpen Jante’s argument to get legislation cleared in the House and better monitor the financial landscape. SAB 121 will also be discussed, with the bulletin likely to be on the table for a longer time.