US House of Representatives Overturns SEC's Anti-Crypto Policy, President Biden Threatens to Veto

Bill to Overturn SEC's Anti-Crypto Guidance Passed by House of Representatives

The United States House of Representatives has voted in favor of a bill that seeks to overturn the Securities and Exchange Commission (SEC)'s guidance that discourages banks from owning cryptocurrency. The controversial guidance, known as Special Accounting Bulletin (SAB 121), requires banks to include their customers' crypto assets on their balance sheets, a requirement that does not apply to traditional assets such as securities.

Details of the Bipartisan Bill

The bipartisan bill, H.J. Res 109, was passed on May 8. Republican Congressman Mike Flood, who introduced the resolution, argued that SAB 121 unfairly disadvantages banks wishing to custody crypto, as custodial assets are typically considered off-balance sheet. Flood also criticized the SEC for not consulting with banking regulators and accused SEC Chairman Gary Gensler of overstepping his authority.

Support for the Bill

The bill received support from both sides of the aisle, with 21 Democrats voting in favor. Coupled with the unanimous votes from 207 Republicans, the bill was passed with 228 votes to 182. The House Financial Services Committee (HSFC) stated that by overturning SAB 121, the resolution removes obstacles that prevent highly regulated financial institutions from acting as custodians of digital assets.

Opposition to the Bill

Despite its passage in the House of Representatives, President Joe Biden has vowed to veto the bill. He argued that SAB 121 was implemented in response to significant technological, legal, and regulatory risks that have resulted in substantial losses to consumers. The White House echoed Biden's sentiment, stating that the bill would disrupt the SEC's efforts to protect investors in the crypto-asset markets and safeguard the financial system.

Implications of the Bill

If the bill is enacted, it would not only overturn SAB 121 but also prevent the implementation of any similar rules in the future. This has raised concerns among some lawmakers, including key House Democrat Rep. Maxine Waters, who argued that the bill's approach is too drastic and could undermine necessary crypto disclosures.

In conclusion, the debate around the SEC's anti-crypto policy and the passing of the bill to overturn it highlights the ongoing tension between the need for regulatory oversight and the desire for innovation in the rapidly evolving world of digital assets. What are your thoughts on this development? Do you think the bill should be vetoed or enacted? We would love to hear your opinions. Please share this article with your friends and remember to sign up for the Daily Briefing, which is delivered every day at 6pm.