10 May

The US House of Representatives has passed a resolution aimed at overturning the Securities and Exchange Commission (SEC)'s 2022 bulletin concerning crypto custodian accounting.

US President Joe Biden has issued a statement expressing his opposition to the resolution and suggesting a potential veto if the bill clears the Senate.

Republicans and Democrats Unite Against the SEC

On May 8, a bipartisan group of lawmakers in the House of Representatives, consisting of 21 Democrats and 207 Republicans, voted in favor of H.J.Res.109, aiming to nullify Staff Accounting Bulletin (SAB) 121. This bulletin mandates that custodians of cryptocurrencies and other digital assets recognize these assets as liabilities in their accounting records.

The rule has faced criticism for its impact on US banks' ability to hold cryptocurrencies, which some argue renders their crypto business unfeasible. Republican Congressman Mike Flood contended that the SEC's accounting standards for crypto custody are unjust and impede banks interested in offering such services.

The resolution passed the House with 228 representatives voting in favor and 182 opposing it. It now awaits a vote in the Senate before potentially reaching the President's desk. If approved, the resolution would enable financial institutions to hold cryptocurrencies under more viable requirements.
Although the bipartisan support in the House was noteworthy, Fox Business journalist Elizabeth Terret believes the bill is unlikely to pass the Senate or be signed into law by the President.

SAB 121 has drawn criticism from prominent figures such as Patrick McHenry, the Chairman of the Financial Services Committee. McHenry described the bulletin as a clear example of regulatory overreach during Gary Gensler's tenure as SEC Chair. He voiced his support for the resolution, emphasizing its importance in safeguarding consumers and promoting innovation in digital asset markets, while also preventing regulatory overreach by the SEC.

Senator Cynthia Lummis has also been vocal in her opposition to the unnecessary SAB 121 rule. She has criticized the US government's overreach in the industry and expressed concerns about the Department of Justice's aggressive stance against the sector.

President Biden Backs SEC's Crypto Crackdown Initiative

Following the US House Representatives' vote in favor of the resolution, the White House has addressed the issue, expressing strong opposition to its passage. According to the statement, the Biden administration views the bill as disruptive to the SEC's efforts to protect investors in crypto-asset markets and ensure the stability of the broader financial system.

Furthermore, the statement suggests that invoking the Congressional Review Act to nullify the SEC's regulations could limit the agency's ability to establish appropriate regulations in the future. The White House believes that restricting the SEC's regulatory authority over digital assets could lead to significant financial instability and market uncertainty.

Ultimately, the statement asserts that President Biden would veto the resolution if it were to pass the Senate.

May 2024, Cryptoniteuae

* The email will not be published on the website.