#SEC #CryptoPolicy #SAB121 #BipartisanSupport #FinancialInnovation #DigitalAssets #CongressionalReviewAct #CryptoRegulation
The United States Senate has recently voted in favor of H.J. Res 109, a resolution aimed at overturning the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin No. 121 (SAB 121), reflecting a significant bipartisan pushback against the SEC’s stance on cryptocurrency regulation. This follows the House of Representatives’ approval, indicating widespread political support for adjusting the regulatory approach towards digital assets. Initially introduced in March 2022, SAB 121 required financial institutions to record their customers’ digital assets on their balance sheets, a policy criticized for imposing unnecessary financial and operational burdens on firms dealing with cryptocurrencies and potentially putting customer assets at risk in bankruptcy situations.
Senator Cynthia Lummis, known for her pro-cryptocurrency views, led the effort to pass the resolution. She argued that SAB 121 could endanger customer assets by making them vulnerable to claims by creditors in the event of a custodian’s bankruptcy. Such a situation, she noted, could see consumers’ assets frozen for extended periods or even lost entirely, contradicting the intent to protect consumers. In advocating for the resolution, Senator Lummis also highlighted the benefits of self-hosted digital wallets, showcasing a preference for empowering consumers with direct control over their digital assets, further straying from the restrictive measures advocated by the SEC.
The passage of this resolution by the Senate, coupled with significant approval from the House, marks a pivotal moment in the intersection of cryptocurrency and legislation, being hailed as the first standalone piece of crypto legislation to pass through Congress. However, despite this legislative victory, the resolution’s effectiveness hangs in the balance with President Joe Biden’s veto threat looming. The administration argues that overturning SAB 121 would weaken the SEC’s ability to safeguard investors and the broader financial system from crypto-related risks. This stance has sparked further debate amongst legislators and industry leaders who are already mobilizing support for crypto-friendly political candidates, aiming to secure a regulatory environment that fosters innovation and growth within the digital finance sector.
Amidst these developments, notable industry figures and organizations, such as MicroStrategy’s Michael Saylor and the newly formed political action committee “Stand With Crypto” by Coinbase, have voiced strong support for the resolution. They argue for the importance of embracing financial innovation and adjusting regulatory frameworks to support the flourishing crypto market. As the Biden administration hardens its regulatory stance against the crypto industry, the ongoing dialogue between lawmakers, regulators, and industry stakeholders will be crucial in shaping the future landscape of digital asset regulation and governance in the U.S.
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