[NEWS] US Senate passes SEC vote to repeal cryptocurrency accounting rules; President Biden threatens to veto

The U.S. Senate passed a resolution to repeal SAB 121, the SEC's accounting rule for crypto assets.

The SEC policy, called SAB 121, concerns the accounting reporting of digital assets, including crypto assets, by banks. It requires banks to record their customers' crypto assets as liabilities on their balance sheets, which has caused controversy both inside and outside the crypto industry.

The resolution passed the Senate by a vote of 60 to 38. On the 8th of this month, the House of Representatives, which is dominated by Republicans, also passed the resolution by a vote of 228 to 182, and there were voices of opposition to SAB 121 across party lines. In the vote, Democratic Senators Chuck Schumer, Cory Booker, and Jon Tester all voted in favor.

With the passage of the resolution, the bill will be sent to the White House, but President Biden has stated that he will veto it. He explained that the reason for this is that "restricting the SEC's ability to maintain a comprehensive and effective financial regulatory framework for crypto assets would result in significant financial instability and market uncertainty."

If President Biden vetoes the bill, it will be returned to Congress for a vote. At that time, a two-thirds majority is required to override the President's veto. Specifically, 290 members of the House of Representatives and 67 members of the Senate must vote in favor.

Possibility of the Biden Administration's stance becoming clearer

Republican Senator Cynthia Lummis said in a statement, "President Biden should take note of the bipartisan support that the CRA (Congressional Review Act) has received in both the House and the Senate and sign it into law." The CRA was enacted in 1996 and is intended to strengthen congressional oversight of government agency rulemaking.

In addition, Coby Carbone, vice president of policy at the Chamber of Digital Commerce, said, "I hope the president will not see the bipartisan support for this resolution as a rebuke to the administration, but rather as a consensus that no independent regulator is above the law and that consumer protection should take precedence over personal vendettas against an unfortunate industry," and called for a flexible response rather than sticking to the administration's position.

In the debate before the vote, Senator Elizabeth Warren, a leading Democrat who voted against the bill, argued that cryptocurrencies are riskier than other assets. She cited incidents such as hacking as a reason and said that companies need to explain the risks in their financial disclosures.

The passage of this resolution means that senators and representatives are criticizing the SEC's relentless crackdown on the cryptocurrency industry. Although it is unknown whether the bill will be officially enacted into law due to a veto or other reasons, if the bill is invalidated, it is inevitable that the Biden administration will have a stronger impression of being negative toward crypto assets.

Reference: Voting results
Image: Shutterstock

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