Just as the U.S. House of Representatives approved a resolution demanding that the Securities and Exchange Commission roll back its anti-crypto banking policies, the White House preemptively declared that it will be vetoed if passed.
The resolution to overturn a 2022 SEC bulletin passed with bipartisan support, 228-182, on Wednesday, earning praise from crypto advocates within and outside Capitol Hill.
”With the disapproval resolution, the House is taking a stand to ensure that such significant changes go through the proper public rulemaking process,” said Amanda Russo, director of communications of the Crypto Council for Innovation, in a statement shared with Decrypt. ”This is vital for maintaining a competitive and innovative financial landscape.”
#WATCH: Chairman @PatrickMcHenry delivers remarks in support of H.J.Res. 109 to nullify SAB 121:
“This bipartisan resolution is an essential effort to protect consumers and foster innovation in digital asset markets.”
Read more 🔗https://t.co/jnIBJFHIPj
📺 Watch 👇 pic.twitter.com/fOxOh8DtWH
— Financial Services GOP (@FinancialCmte) May 8, 2024
The impact of the vote was blunted, however, by a statement issued by the Biden administration hours before.
“The administration strongly opposes passage of H.J. Res. 109, which would disrupt the SEC’s work to protect investors in crypto-asset markets and to safeguard the broader financial system,” it read. “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.”
If the resolution made it to President Joe Biden’s desk, the statement concluded, he would veto it.
The focus of the dispute is a normally uncontroversial Staff Accounting Bulletin (SAB) issued in April 2022. “The obligations associated with these arrangements involve unique risks and uncertainties not present in arrangements to safeguard assets that are not crypto-assets, including technological, legal, and regulatory risks and uncertainties,” the bulletin read.
“Traditionally, staff accounting bulletins are not designed to enact sweeping policy changes—they are meant to clarify existing rules,” Russo said. “SAB 121, however, acts as a new rule, impacting core aspects of the financial and digital asset industries.”
Rep. Mike Flood (R-Nebraska) introduced a resolution in the House condemning SAB 121, while a companion resolution was introduced in the Senate.
“It is unfortunate that the SEC would attempt to circumvent the rulemaking process while falsely claiming that SAB 121 is simply non-binding staff-level guidance,” Flood said on Monday.
Longtime SEC critic Rep. Tom Emmer expressed strong support for the House resolution today.
This resolution is an essential effort to protect consumers and foster innovation in digital assets markets,” he said. “It’s also critical to stop the SEC’s regulatory power grabs.”
“SAB 121 introduces more unnecessary and avoidable concentration risk into the digital asset ecosystem, making our markets less fair, less orderly, and less efficient,” Emmer had said earlier this week, adding on Twitter that SEC chair Gary Gensler is violating his agency’s statutory mission.
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