Senate Votes 60-38 to Repeal SEC’s Crypto Policy

Senate Votes for Crypto Policy: 60-38 to Repeal SAB 121

The Senate’s vote on the matter concluded with 60 in favour and 38 against out of 98 votes. The breakdown revealed a substantial partisan divide, with 12 Democrats and 48 Republicans supporting the repeal. On the other hand, the House of Representatives had earlier voted on 9 May 2024. A total amount cast 410 votes. Moreover, the House saw 228 in favour and 182 against, including 21 Democrats joining the majority.

President Biden’s administration has firmly indicated a potential veto of the resolution. Therefore citing concerns that overturning SAB 121 could undermine investor protection and destabilise the financial system. The administration emphasised the importance of maintaining rigorous oversight over the rapidly evolving crypto market to safeguard consumers and the broader economy.

Key Figures Criticise SEC’s Crypto Policy

Senate Majority Leader Chuck Schumer (D-N.Y.) opposed the SEC’s crypto accounting policy. Furthermore, aligning with other notable critics. Senator Cynthia Lummis (R-Wyo.) emerged as a vocal opponent of SAB 121, labelling it detrimental to consumer protection and a failure in policy direction. Lummis stated that this outcome is a victory for financial innovation and a clear criticism of how the Biden administration and Chair Gary Gensler have handled crypto assets.

Representative Mike Flood (R-Neb.) praised the bipartisan support for the repeal and urged President Biden to reconsider his veto stance, highlighting the clear and overwhelming opposition to SAB 121.

Representative Wiley Nickel (D-N.C.) echoed the sentiment, calling for the SEC to withdraw the bulletin. Nickel asserted that the Senate’s vote to repeal SAB 121 sends a clear bipartisan message that Congress will not stand idly by as Gary Gensler and the SEC deliberately sidestep the statutory rulemaking process and overstep their regulatory authority.

Controversies and Criticisms of SAB 121

Since its introduction, SAB 121 has been a contentious issue, requiring financial institutions that hold customers’ crypto assets to record them on their balance sheets. This directive has been criticised by the American Bankers Association (ABA) for making it financially prohibitive for banks to serve as custodians for spot Bitcoin ETFs. Lawmakers have also rebuked the SEC for allegedly bypassing the public comment and rulemaking processes in implementing SAB 121.

The repeal of SAB 121 marks the first standalone piece of crypto legislation to pass both chambers of Congress. This development could have profound implications for the SEC’s future regulatory authority over crypto-assets. An SEC spokesperson defended the bulletin, stating that SAB 121 is non-binding staff guidance that enhances important disclosure to investors in firms that safeguard crypto assets for others if followed.

First Crypto Legislation to Pass Congress

The repeal of SAB 121 by Congress represents a pivotal moment in the legislative landscape concerning cryptocurrency regulation. As the debate continues, the focus now shifts to President Biden’s anticipated veto and the subsequent responses from both legislative and financial sectors. The outcome of this political tussle will likely shape the future regulatory environment for cryptocurrencies in the United States.