June 16, 2024
1 Solar System Way, Planet Earth, USA

Lawmakers Press Biden to Approve Repeal of SAB 121 to Allow Regulated Financial Firms to Hold Cryptocurrencies

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House Financial Services Committee Chairman Patrick McHenry (R-NC) and Senator Cynthia Lummis (R-WY) led a letter urging President Joe Biden to reconsider his veto of the bipartisan House resolution. Congressional Review Act (CRA) overturns Securities and Exchange Commission (SEC) staff accounting. Bulletin 121 (SAB 121). SAB 121 prohibits highly regulated financial companies from holding Bitcoin and cryptocurrencies.

“Given the overwhelming bipartisan votes, we urge you to sign HJ Res. 109 into law or work with the SEC to rescind the staff guidance,” the letter said. “Rescinding SAB 121 is within the SEC's authority and there is ample precedent for revising a staff accounting bulletin.”

This CRA passed the Senate 60-38 and the House 228-182. McHenry said it protects consumers and essential escrow services. Senators Kirsten Gillibrand (D-NY), Representatives French Hill (R-AR), Ritchie Torres (D-NY) and others also urged regulators to declare SAB 121 unenforceable after the Government Accountability Office would consider it a rule under the CRA.

On November 15, McHenry, Lummis, Flood, Nickel, Gillibrand, Hill and Torres made this argument to federal regulators. On February 1, Lummis, Flood and Nickel introduced the bipartisan CRA.

As reported According to Crypto Briefing, a Biden veto was almost certain, after the US president expressed his intentions, citing the need to protect investors and the financial system. If a presidential veto were to occur, Congress would need a two-thirds majority to override it.

However, recent developments in the US regulatory landscape could increase the chances that Biden will decide not to veto the bill. According to Eric Balchunas, an ETF analyst at Bloomberg, the sudden change of stance observed by the SEC towards a timely approval of the Ethereum ETF was motivated by “political issues.”

Additionally, presidential candidate Donald Trump has recently shown a pro-cryptocurrency approach in his campaign, and Biden may want to stay on the good side of this electorate.

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