The U.S. House of Representatives recently voted on whether to override President Joe Biden’s veto, but the attempt failed. This means that the Securities and Exchange Commission’s crypto accounting policy, known as Staff Accounting Bulletin 121 (SAB 121), will remain in place.
President Biden vetoed a bipartisan effort by Congress to eliminate SAB 121, which advised public companies, particularly banks, on how to account for customers’ crypto assets. The policy required these assets to be held on the banks’ balance sheets, which could potentially lead to higher capital demands for the banks.
Despite a majority of lawmakers voting against President Biden’s defense of the SEC’s policy, the turnout was not enough to override the veto. Both Democrats and Republicans were divided on the issue, with some arguing that the policy was punitive and anti-digital asset, while others believed it was necessary to protect customers’ assets.
Rep. Maxine Waters mentioned that the SEC is in talks with banking industry representatives to make targeted modifications to the policy. However, Republicans are pushing for a complete overturn of SAB 121, claiming that it is flawed and undermines the regulator.
The debate over SAB 121 has garnered attention from the crypto industry, with many expressing concerns about the SEC’s approach to digital assets. Despite efforts by Congress to overturn the policy through the Congressional Review Act, President Biden’s veto means that the policy will remain in effect.
In a recent roundtable meeting between prominent figures in the crypto industry and lawmakers, there was a call for the White House to show support for the sector. The industry is looking for a strong signal from the Biden administration that they are willing to engage with Republicans in supporting crypto.
Overall, the failed attempt to override President Biden’s veto highlights the ongoing debate surrounding the SEC’s crypto accounting policy. While some believe that the policy is necessary to protect customers’ assets, others argue that it is punitive and flawed. The future of SAB 121 remains uncertain as discussions between the SEC and banking industry representatives continue.