In a display of bipartisan rebellion against the Securities and Exchange Commission (SEC), the U.S. House of Representatives recently passed a resolution, H.J. Res 109, aimed at nullifying the SEC’s Special Accounting Bulletin (SAB 121). This controversial bulletin has effectively erected barriers against banks from holding crypto assets for their clients.
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The Political Arena Heats Up
The resolution, led by Republican Congressman Mike Flood, passed with notable Democratic support, garnering 21 votes from across the aisle and a unified Republican backing, culminating in a 228 to 182 vote. This move directly challenges the SEC’s recent guidelines, which treat crypto holdings differently from traditional assets, like securities, demanding their inclusion on banks’ balance sheets.
However, President Joe Biden is not on board. Even before the House cast its votes, the White House sent a strong signal: a veto awaits the bill should it arrive at the President’s desk. The White House’s statement was clear: it opposed any efforts undermining the SEC.
A Battle of Regulatory Philosophy
The resolution and its widespread political support reflect a deeper perspective on the role and reach of regulatory bodies in the digital asset space. Advocates like Amanda Russo from the Crypto Council for Innovation applauded the House’s decision. She emphasized the necessity for such regulatory changes to undergo a proper public rulemaking process, crucial for sustaining a competitive and innovative financial landscape.
Critics, including cryptocurrency’s biggest advocate on Capitol Hill and longtime SEC opponent Rep. Tom Emmer, vehemently opposed SAB 121. He argued that SAB 121 not only introduces unnecessary risks into digital assets but also represents an overreach of regulatory power under SEC Chair Gary Gensler. Crypto supporters contend that the bulletin veers away from its purported intent as non-binding guidance, acting instead as a rule that could stifle innovation and consumer protection.
As this legislative drama unfolds, the crypto community watches, aware that the resolution’s fate could significantly influence the regulatory landscape for crypto assets in the U.S., setting a precedent for how financial regulatory frameworks adapt to new technological frontiers.
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