tl;dr
The U.S. House of Representatives has approved a resolution rejecting the Securities and Exchange Commission's (SEC) cryptocurrency accounting guidance, known as SAB 121. The guidance has been criticized for deterring banks from handling crypto customers. President Joe Biden has stated that he will ...
The U.S. House of Representatives has approved a resolution rejecting the Securities and Exchange Commission's (SEC) cryptocurrency accounting guidance, known as SAB 121. This guidance has been criticized for deterring banks from handling crypto customers. President Joe Biden has stated that he will veto the resolution if it reaches his desk.
The resolution, supported by some Democrats, aims to disapprove of the SEC's guidance and could impact the agency's future regulatory framework for crypto-assets. It starts a formal process to kill the SEC's controversial accounting policy on crypto custody.
The SEC's Staff Accounting Bulletin No. 121 (SAB 121) has faced criticism from digital assets businesses and Republican lawmakers for potentially incurring massive capital expenses on banks holding customers' digital tokens. The White House considers the policy worth defending with a veto, emphasizing the perceived risks to consumers.
Despite President Biden's threat to veto, the House vote went strongly in favor of the resolution, including support from 21 Democrats. The resolution also faces a matching effort in the Senate before reaching the President's desk.
While the resolution focuses on the controversial custody component, it also encompasses guidance on crypto disclosures, which are deemed necessary. There are concerns that overturning the policy could inappropriately constrain the SEC's ability to address future issues related to crypto-assets, introducing financial instability and market uncertainty.
Rep. Mike Flood, the effort's sponsor, expressed disappointment in the President's stance and vowed to pursue every available avenue to reintroduce the language into legislation prior to the year's end.
UPDATE (May 8, 2024, 22:11 UTC): The House has voted to approve the resolution.
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