The U.S. Congress has passed its first standalone crypto legislation, which aims to overturn the controversial U.S. Securities and Exchange Commission (SEC)’s SAB 121 rules regarding crypto assets. However, President Joe Biden has threatened to veto this decision, citing concerns about financial stability and market uncertainty.

‘We Are Just Getting Started’

In a historic move, the U.S. Congress passed its first standalone crypto legislation last week. The bill seeks to overturn the controversial U.S. Securities and Exchange Commission (SEC)’s Staff Accounting Bulletin No. 121 (SAB 121).

U.S. Senator Cynthia Lummis (R-WY) announced on social media platform X Thursday that the Senate’s passage of a Congressional Review Act (CRA) overturning SAB 121 is a significant victory for financial innovation and a clear rebuke of the way the Biden administration and SEC Chair Gary Gensler “have persecuted crypto.” She emphasized that this marks the first time Congress has passed standalone crypto legislation and indicated that further efforts are forthcoming. The CRA is a law that enables Congress to review and potentially overturn regulations issued by federal agencies.

SAB 121 mandates entities holding crypto assets for users to record these as liabilities and corresponding assets at fair value on their balance sheets. The bulletin has faced criticism for potentially imposing significant financial burdens on banks and financial institutions, possibly deterring them from offering crypto asset custody services.

House Financial Services Committee Chair Patrick McHenry (R-NC) described: “SAB 121 requires financial institutions and firms that are safeguarding their customers’ digital assets to hold those assets on their balance sheet, making it cost prohibitive to do so.” The congressman stressed:

Staff Accounting Bulletin 121 is one of the most glaring examples of the regulatory overreach that has defined Gary Gensler’s tenure at the SEC.

The U.S. House of Representatives voted to overturn SAB 121 earlier this month, followed by the U.S. Senate’s vote to repeal the bulletin last week.

However, President Joe Biden has threatened to veto the decision. According to a statement issued by the White House: “Limiting the SEC’s ability to maintain a comprehensive and effective financial regulatory framework for crypto assets would introduce substantial financial instability and market uncertainty.”

Source : Bitcoin News / May 19, 2024