House to Revisit Crypto Regulation Bill Vetoed by Biden
Proving their willingness to do so once again, the House will examine the bill aimed at rescinding the SEC’s directive, which critics maintain disrupts the collaboration between crypto companies and banks, on the controversial way the aforementioned SEC’s measure was structured.
Scheduled Reconsideration
The House Majority Leader, Mr. Steve Scalise has, as a matter of fact, planned to consider the vetoed bill by President Joe Biden in May again on July 9 or later. The fact that the measure had already been previously passed with the approval of both the House and Senate, and it is now the two-thirds majority that is required to override Biden’s veto that may be challenging, has finally become clear to the public.
The Controversial SEC Directive
In the month of March 2022, the Securities and Exchange Commission (SEC) had issued a directive called the “Staff Accounting Bulletin No. 121”, that advised all financial institutions dealing with crypto holdings on behalf of the customers to include the assets in their balance sheets as if they owned them. The instruction came under the scanner as it was claimed that the banks refused to deal with cryptocurrency custody services on a huge scale. Despite the majority of the House being on board, Tom Emmer—the Republican majority whip of the House—claimed that noncompliance of SAB 121 was the execution of an illegal task and at the same time, was the breach of the statutory mandate of the SEC.
Bipartisan Support and Criticism
The chamber already accounted for the voting on a bill that both supporters and critics of which thought to be not timely and ultimately come to a stall point. In spite of the tense SAB 121 dialogue, a great deal of support from both parties still lifted the bill through Congress successfully. Officials, banks, the investors, crypto, and even skeptics of cryptocurrency—usually opposed on most of the issues—were together in wanting to see SAB 121 removed. They claimed that the guidance does not only make banks treat crypto assets in a manner different from other types of assets but also it is stuffing them with the irrelevant and unnecessary costs of complexity which lead them to the land of confusion.
Financial Organizations’ Implications
The guidance, though being more of an informal rule, the lack of clarity on how banks’ need for non-crypto assets or how the SEC would implement it has scared many big companies from jumping into the crypto custody business.
Presidential Veto and Justification
During the time when President Biden annulled the bill, he put the letter on the White House website with a description of his decision. He maintained that his office was not going to support measures that might end up endangering consumers and investors. He also mentioned that SAB 121 contained viewpoints of deep technical analysis on responsibilities of firms that hold crypto assets for customer’s
To the Future
When the House goes back to the bill, the cryptocurrency sector and its defenders are keeping a close watch to see if the bill can assemble the necessary support to overturn the presidential veto and repeal SAB 121. The result may have a serious impact on the way banks will handle crypto assets and may affect the future of crypto custody services in the United States.
