H.J. Res 109 overturned the US SEC‘s contentious Staff Accounting Bulletin No. 121 60-38 in the US Senate. After House approval, this bipartisan decision challenges the SEC’s crypto policy.
Financial institutions must incorporate consumers’ digital assets on their balance sheets under SAB 121, launched in March 2022. Critics say this overburden crypto companies and threatens consumer assets after bankruptcy.
Senator Cynthia Lummis spearheaded the resolution’s approval, warning against SAB 121. She warned that institutional balance sheets might risk clients’ assets during bankruptcies.
Lummis argued SAB 121 puts consumers at risk by mandating banks to display consumer assets on their balance sheets. Bankruptcy may freeze these assets for months or years for creditors. Some clients lose all their assets.”
Lummis advocated self-hosted digital asset wallets and opposed the Department of Justice’s non-custodial crypto services.
Lummis told reporters that the Senate’s social media vote was a victory for financial innovation and a rebuke to the Biden administration’s crypto regulation. “This marks the first standalone crypto legislation passed by Congress,” she wrote on X.
Crypto enthusiasts applauded the move. “Wall Street, the House, and now the Senate want Bitcoin,” said MicroStrategy founder and Bitcoin enthusiast Michael Saylor on X.
Congress passed the resolution, but not enough to override the veto. Overturning SAB 121 will impair the SEC’s capacity to safeguard investors and the financial system from crypto-related dangers, thus President Joe Biden will veto the resolution.
Biden’s government has tightened crypto regulation. In reaction, business executives are supporting pro-crypto politicians.
To promote crypto-friendly politicians, Coinbase formed “Stand With Crypto” PAC. Mark Cuban and Hayden Adams fear that Biden’s position might affect elections.
This argument over SAB 121 underscores the regulatory clash with the crypto sector. Crypto proponents say excessive regulation stifles innovation and puts consumers at danger, even while the SEC protects investors.
As President Biden receives the resolution, SAB 121’s fate is unknown. The crypto sector regulation issue would certainly grow if vetoed.
The Senate’s decision is a turning moment in the crypto regulatory debate, demonstrating the crypto community’s rising power.
