American Democratic Congressman from North Carolina Wiley Nickel accused the US SEC of bias towards the cryptocurrency sector and reluctance to fulfill its powers to protect investors.

In a letter sent to SEC Chairman Gary Gensler, Wiley Nickel said the regulator was inconsistent with its mission to protect investors. The agency is exceeding its authority by attempting to adopt Accounting Matters Bulletin 121 (SAB 121), the letter states. Under SAB 121, financial institutions that report to the SEC and hold cryptocurrencies must report them as liabilities on their balance sheet.

Nickel believes the rule will prevent US banks from holding large volumes of cryptocurrency-related products. This will create a “concentration risk” of funds among non-banks. Many American investors will begin to look for ways to store deposits offshore, which could be much riskier, the congressman fears.

“The SEC's open hostility toward the crypto industry does not serve President Biden's interests. The SEC is turning cryptocurrency regulation into a political football and forcing Biden to decide which side to play on,” Nickel wrote.

The politician called on Gensler to withdraw SAB 121, even being confident that the Senate would pass a resolution to reject SAB 121 at the May 16 vote on this issue. Last week, the US House of Representatives voted to pass a bill to repeal this ballot.

Many Republicans share Nickel's position. Recently, Wyoming Senator Cynthia Lummis said the Biden administration is “criminalizing” cryptocurrencies because SAB 121 imposes too stringent regulations on financial institutions.