Regulation
US lawmakers vote to repeal controversial SEC accounting rules for cryptocurrencies
The U.S. Senate voted to repeal SEC Staff Bulletin 121 (SAB 121) on May 16th.
In all, 60 Senators voted in favor of HJ Res. 109, a bill overturning resolution, while 38 Senators voted against it.
The results show bipartisan support for reversing the SEC rule. Of the 60 senators who voted in favor of the resolution, 11 were Democrats, 48 Republicans and one was independent.
Representative Wiley Nickel commented that the latest vote “sends a clear bipartisan message” about the SEC’s alleged regulatory overreach. He added:
“We should never have resorted to using a [Congressional Review Act] to solve this problem, but unfortunately it’s the only tool we have left.”
Congressman Tom Emmer approved the repeal of SAB 121, stating this cryptocurrencies are “in a political tug of war” between administrators and individuals, adding that a presidential veto would “kill opportunities for Americans at Americans’ expense.”
Biden will likely veto
ON May 8ththe Biden administration issued a notice indicating that President Joe Biden would veto the resolution if the Senate voted for it.
The administration has warned that revoking SAB 121 could interfere with the SEC’s efforts to protect investors and safeguard the financial system.
On May 9, the House of Representatives voted in favor of the resolution with 228 votes in favor and 182 against, sending it to the Senate.
Both the Senate and House votes show that a majority of lawmakers are in favor of the resolution. However, the Senate’s latest vote is not high enough to override the presidential veto, which would require a two-thirds majority vote in both the Senate and House.
Disputes over SAB
SAB 121 requires financial institutions and companies that protect their customers’ assets to maintain them on their balance sheets.
The bulletin is controversial for a number of reasons. The American Bankers Association (ABA) believes that SAB 121 makes it cost-prohibitive for banks to act as spot custodians of Bitcoin ETFs.
It also believes that SAB 121 does not distinguish between cryptocurrencies on public registries and traditional assets on authorized registries. However, the association wants changes rather than a total repeal.
Lawmakers, meanwhile, criticized the bill for both its contents and the SEC’s method of introducing the rule. Patrick McHenry alleges the SEC circumvented public comment and the rulemaking process through the use of staff guidance.