Regulation
Senate joins House in overturning SEC’s crypto dominance, Biden threatens veto
(Kitco News) – Regulation of the cryptocurrency industry continues to be a contentious issue in the United States as a majority of Senate lawmakers passed a joint resolution on Thursday calling on the Securities and Exchange Commission (SEC) to eliminate a rule targeting cryptocurrencies. Financial institutions do business with crypto companies.
60 senators voted “yes” to HJRes. 109, a resolution rescinding SEC Staff Accounting Bulletin No. 121 (SAB 121), while 38 voted against the measure.
SAB 121 was designed to help clarify the accounting treatment of cryptocurrencies, ordering banks that hold a customer’s digital tokens to do so on their balance sheets, potentially incurring large capital expenditures. The measure was widely criticized by both lawmakers and cryptocurrency industry leaders, who warned that the bill would stifle innovation and further push the cryptocurrency industry into more welcoming jurisdictions.
President Biden he promised he would veto HJRes. 109 if approved, setting the stage for a clash between Congress and the White House.
“SAB 121 was issued in response to demonstrated technological, legal and regulatory risks that have caused substantial losses to consumers,” Biden said at a news conference. declarationadding that he “strongly opposes” stopping the SEC’s work on this matter.
“By virtue of relying on the Congressional Review Act, this may also inappropriately limit the SEC’s ability to ensure adequate protections and address future issues related to crypto-assets, including financial stability,” the statement reads. “Limiting the SEC’s ability to maintain a comprehensive and effective financial regulatory framework for crypto-assets would introduce substantial financial instability and market uncertainty. If HJ Res. 109 were presented to the President, he would veto it.”
Since Congress chose to use the Congressional Review Act to attack policy, the SEC will not legally be able to pursue similar policies in the future if the reversal is ultimately successful.
Despite Biden’s statement, the House voted strongly in favor of the resolution on May 8, with 21 Democrats joining Republicans in approving the measure. With the Senate also approving it, all eyes are now on President Biden to see if he will follow through on his veto threat.
“The result, a staggering 60 ‘Yes’ votes in the Senate, sends a strong signal that both houses of Congress, across political divides, clearly disapprove of this rule,” She said cryptocurrency advocacy group Blockchain Association in a post on X on Thursday. “With the weight of the American public through the legislative process, SAB 121 CRA now heads to President Biden’s desk.”
“The threat of a presidential veto negates the fact that there is a growing awareness among the voting public, particularly young people, that cryptocurrencies are something our elected officials should be concerned about,” they added. “A a recent @DCGco poll found 48% of state voters undecided Don’t trust political candidates who interfere with cryptocurrencies.”
“Consumers should not be punished simply for adopting new technologies. And keeping our highly regulated banking industry and its customers out of digital assets by default makes no sense,” they concluded. “This group of voters is a growing force in US politics, and Congress is on their side. We hope that the administration aligns itself with a comfortable majority in both houses and signs the repeal of SAB 121.”
Notably, according to Senator Cynthia Lummis, this was the first time during this session of Congress that both houses passed standalone cryptocurrency legislation.
“The Senate passing a CRA that overturns SAB 121 is a victory for financial innovation and a clear rebuke to the way the Biden admin and Gary Gensler have gone after cryptocurrencies,” he said. tweeted. “It also marks the first time Congress has passed standalone cryptocurrency legislation. We have just started. @POTUS, do the right thing and sign this bipartisan resolution into law.
Representative Mike Flood (R-NE), who sponsored the resolution, called the vote was a “historic achievement” thanks to bipartisan support.
“It is clear that there is overwhelming opposition to SAB 121, and I urge President Joe Biden to reconsider his previous statement of intent to veto the resolution,” he added. “The president should sign my resolution to ensure the SEC reverses course and sets America on a path to grow our digital financial future.”
“Today’s Senate vote to repeal SAB 121 sends a clear bipartisan message: Congress will not stand by while Gary Gensler and the SEC deliberately circumvent the statutory rulemaking process and overstep their regulatory authority,” the congressman said Wiley Nickel (D-NC), co-sponsor of the House resolution.
If President Biden follows through on his veto threat, the resolution will return to Congress, which will then have the ability to override the veto with a two-thirds majority vote in both the House and Senate. If they reach the required majority, the bill will become law despite the President’s veto.
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