U.S. congressional watchdog says SEC needs to get approval from lawmakers before proceeding with controversial announcement

According to the US Government Accountability Office (GAO), guidance from the Securities and Exchange Commission (SEC) on how companies should account for holding cryptocurrency must be publicly disclosed before it can take effect in Congress. Staff Accounting Bulletin No. 121 from the SEC, released in March 2022, requires companies holding cryptocurrency to record their customers' holdings as liabilities on their balance sheets. This bulletin is subject to the Congressional Review Act (CRA), which requires agencies to submit a report to Congress about the rule before it takes effect, according to the congressional watchdog on Tuesday. The CRA, enacted in 1996, aims to strengthen congressional oversight of agency rule-making. GAO said on Tuesday that "we conclude that the bulletin is a rule for purposes of the CRA because it meets the definition of a rule under the APA [Administrative Procedure Act], without exception applicable. Therefore, the bulletin must be submitted to Congress." SEC said the bulletin is not subject to the CRA because it did not meet the definition of a rule, according to GAO.