US Senate Votes to Repeal SEC Directive

On May 16, the US Senate passed a joint resolution to annul the Staff Accounting Bulletin 121 (SAB 121) issued by the Securities and Exchange Commission (SEC).

2/ The tally, a stunning 60 “Yeas” in the Senate vote, sends a strong signal that both houses of Congress, across the political divide, clearly disapprove of this rule.

— Blockchain Association (@BlockchainAssn) May 16, 2024

“A stunning 60 votes ‘in favour’ in the Senate sends a clear signal that both houses of Congress, despite political differences, clearly disapprove of this rule,” stated the Blockchain Association.

However, the decision supported by the Senate and the House of Representatives may face challenges at a higher level. On May 8, the White House administration announced President Joe Biden’s readiness to veto the bill.

Advisors to the president emphasized that repealing SAB 121 would hinder the SEC’s ability to “protect investors in cryptocurrency markets and ensure the safety of the entire financial system.”

According to Representative Mike Flood, “The Senate, including Majority Leader [Chuck] Schumer, has made it clear to the SEC that SAB 121 must go.”

It is clear there is overwhelming opposition to SAB 121, and I urge @POTUS to reconsider his previous statement of intent to veto the resolution.

— Rep. Mike Flood (@USRepMikeFlood) May 16, 2024

“It is clear there is overwhelming opposition to [the directive], and I strongly urge the president to reconsider his previous statement of intent to veto,” wrote Flood.

Bitcoin advocate Senator Cynthia Lummis reacted to the vote results with a post on X featuring laser eyes.

We are so ₿ack. pic.twitter.com/ckHmXMHFL8

— Senator Cynthia Lummis (@SenLummis) May 16, 2024

SAB 121 was issued in April 2022. The document contains guidelines for the custody of cryptocurrencies. Specifically, banks must reflect them on their balance sheets. This makes the process costly and limits the ability of institutions to provide custodial services on a large scale.

In February, four industry organizations appealed to the SEC to ease SAB 121. Commissioner Hester Peirce described the Bulletin’s provisions and related oral guidance as a “pernicious weed.”

Earlier, Lummis and Congressman Patrick McHenry highlighted the increased risks of client fund loss due to the collapse of a crypto custodian under the rule’s implementation.

In May, Cardano co-founder Charles Hoskinson claimed that Biden aims to destroy the crypto industry in the US.

Uniswap suggested that the current head of state might lose the upcoming election due to his administration’s dismissive attitude towards the cryptocurrency market.

According to a Paradigm survey, 48% of voters holding digital assets plan to vote for Donald Trump in the November elections. 8% prefer Biden, while 13% remain undecided.