{"id":165829,"date":"2024-05-09T11:23:33","date_gmt":"2024-05-09T11:23:33","guid":{"rendered":"https:\/\/crypto-economy.com\/?p=165829"},"modified":"2024-05-09T11:23:36","modified_gmt":"2024-05-09T11:23:36","slug":"us-house-of-representatives-nullifies-sec-guidance-preventing-banks-from-owning-crypto-biden-threatens-veto","status":"publish","type":"post","link":"https:\/\/crypto-economy.com\/us-house-of-representatives-nullifies-sec-guidance-preventing-banks-from-owning-crypto-biden-threatens-veto\/","title":{"rendered":"US House of Representatives Nullifies SEC Guidance Preventing Banks From Owning Crypto, Biden Threatens Veto"},"content":{"rendered":"<p style=\"text-align: justify\"><span data-preserver-spaces=\"true\">TL;DR<\/span><\/p>\n<ul style=\"text-align: justify\">\n<li><strong><span data-preserver-spaces=\"true\">House Passes Bipartisan Bill<\/span><\/strong><span data-preserver-spaces=\"true\">: On May 8, the United States House of Representatives voted to pass a bipartisan bill, H.J. Res 109, which overturns the SEC\u2019s controversial Special Accounting Bulletin No. 121 (SAB 121). This guidance had effectively blocked banks from holding crypto assets on behalf of their customers.<\/span><\/li>\n<li><strong><span data-preserver-spaces=\"true\">Controversial SEC Guidance<\/span><\/strong><span data-preserver-spaces=\"true\">: Introduced in March 2022, SAB 121 outlined accounting guidelines for crypto custody. However, it discouraged banks from acting as custodians due to cost implications. Banks were required to treat crypto assets differently from traditional securities, hindering their ability to provide custodial services.<\/span><\/li>\n<li><strong><span data-preserver-spaces=\"true\">Presidential Veto Threat<\/span><\/strong><span data-preserver-spaces=\"true\"><span data-preserver-spaces=\"true\">: Despite bipartisan support, President Joe Biden opposes overturning SAB 121. The White House argues that it would disrupt investor protection efforts. If the bill reaches his desk, President Biden has threatened to veto it, highlighting tensions in crypto regulation.<\/span><\/span><br \/>\n<hr \/>\n<\/li>\n<\/ul>\n<p style=\"text-align: justify\"><strong><span data-preserver-spaces=\"true\">The United States House of Representatives has taken a significant step in the ongoing battle over\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/crypto-economy.com\/what-are-cryptocurrencies-and-which-are-the-best-to-invest-in\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">cryptocurrency\u00a0<\/span><\/a><span data-preserver-spaces=\"true\">custody regulations.\u00a0<\/span><\/strong><span data-preserver-spaces=\"true\">On May 8, the House voted to pass a bipartisan\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.govinfo.gov\/content\/pkg\/BILLS-118hjres109rh\/pdf\/BILLS-118hjres109rh.pdf\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">bill<\/span><\/a><span data-preserver-spaces=\"true\">, H.J. Res 109,\u00a0<\/span><span data-preserver-spaces=\"true\">which overturns<\/span><span data-preserver-spaces=\"true\">\u00a0the Securities and Exchange Commission\u2019s (SEC) controversial Special Accounting Bulletin No. 121 (SAB 121). This guidance had virtually blocked banks from holding crypto assets on behalf of their customers.<\/span><!--more--><\/p>\n<h2 style=\"text-align: left\"><span data-preserver-spaces=\"true\">The SEC\u2019s Controversial Guidance<\/span><\/h2>\n<p style=\"text-align: justify\"><span data-preserver-spaces=\"true\">Introduced by the SEC in March 2022,\u00a0<\/span><strong><span data-preserver-spaces=\"true\">SAB 121 outlined accounting guidelines for institutions looking to custody crypto assets.\u00a0<\/span><\/strong><span data-preserver-spaces=\"true\">However, it had a chilling effect on banks\u2019 willingness to act as crypto custodians. Under SAB 121, banks were required to hold their customers\u2019 crypto assets on their balance sheets, treating them differently from traditional assets like securities. This approach was\u00a0<\/span><span data-preserver-spaces=\"true\">seen as<\/span><span data-preserver-spaces=\"true\">\u00a0cost-prohibitive and unfair for banks seeking to provide custodial services for digital assets.<\/span><\/p>\n<h2 style=\"text-align: left\"><span data-preserver-spaces=\"true\">House of Representatives Bipartisan Support and Presidential Veto Threat<\/span><\/h2>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone size-full wp-image-165832\" src=\"https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2024\/05\/HouseOfRepresentativesBill.jpg\" alt=\"US House of Representatives Nullifies SEC Guidance Preventing Banks From Owning Crypto, Biden Threatens Veto\" width=\"825\" height=\"300\" srcset=\"https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2024\/05\/HouseOfRepresentativesBill.jpg 825w, https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2024\/05\/HouseOfRepresentativesBill-300x109.jpg 300w, https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2024\/05\/HouseOfRepresentativesBill-768x279.jpg 768w\" sizes=\"(max-width: 825px) 100vw, 825px\" \/><\/p>\n<p style=\"text-align: justify\"><strong><span data-preserver-spaces=\"true\">The bill to overturn SAB 121 received bipartisan support,\u00a0<\/span><\/strong><span data-preserver-spaces=\"true\">with 21 Democrats joining unanimous Republican votes to pass it by a margin of 228 votes to 182.\u00a0<\/span><\/p>\n<p style=\"text-align: justify\"><span data-preserver-spaces=\"true\">Republican Congressman Mike Flood<\/span><span data-preserver-spaces=\"true\">, who<\/span><span data-preserver-spaces=\"true\">\u00a0introduced the resolution<\/span><span data-preserver-spaces=\"true\">,\u00a0<\/span><strong><span data-preserver-spaces=\"true\">emphasized that custodial assets should be<\/span><\/strong><span data-preserver-spaces=\"true\">\u00a0<\/span><strong><em><span data-preserver-spaces=\"true\">\u201calways considered off-balance sheet.\u201d<\/span><\/em><\/strong><span data-preserver-spaces=\"true\">\u00a0The resolution aims to remove roadblocks preventing highly regulated financial institutions from acting as custodians of digital assets.<\/span><\/p>\n<p style=\"text-align: justify\"><span data-preserver-spaces=\"true\">However, President Joe Biden has expressed his opposition to the bill.\u00a0<\/span><strong><span data-preserver-spaces=\"true\">In a statement,<\/span><span data-preserver-spaces=\"true\">\u00a0the White House said it\u00a0<\/span><em><span data-preserver-spaces=\"true\">\u201cstrongly opposes\u201d<\/span><\/em><span data-preserver-spaces=\"true\">\u00a0overturning SAB 121,\u00a0<\/span><\/strong><span data-preserver-spaces=\"true\">arguing that it would disrupt the SEC\u2019s efforts to protect investors in\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/crypto-economy.com\/virtual-currencies\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">crypto<\/span><\/a><span data-preserver-spaces=\"true\">-asset markets and safeguard the broader financial system.<\/span><span data-preserver-spaces=\"true\">\u00a0Despite the House\u2019s approval, President Biden has threatened to veto the bill if it reaches his desk.<\/span><\/p>\n<h2 style=\"text-align: left\"><span data-preserver-spaces=\"true\">Implications and Industry Response<\/span><\/h2>\n<p style=\"text-align: justify\"><strong><span data-preserver-spaces=\"true\">The House Financial Services Committee (HSFC) hailed the resolution<\/span><\/strong><span data-preserver-spaces=\"true\">\u00a0as a necessary step to protect consumers. By nullifying SAB 121, the resolution aims to allow consumers to hold their digital assets through highly regulated banks and other financial institutions.\u00a0<\/span><\/p>\n<p style=\"text-align: justify\"><span data-preserver-spaces=\"true\"><strong>HSFC Chairman Patrick McHenry criticized the regulatory overreach<\/strong> represented by SAB 121 and praised the bipartisan effort to bring commonsense into digital asset policy.<\/span><\/p>\n<p style=\"text-align: justify\"><span data-preserver-spaces=\"true\">The recent actions by the U.S. House of Representatives and the subsequent response from the White House highlight a significant tension within the regulatory framework governing cryptocurrencies.\u00a0<\/span><\/p>\n<p style=\"text-align: justify\"><span data-preserver-spaces=\"true\">The bipartisan support for the resolution to overturn the SEC\u2019s 2022 bulletin reflects a growing concern that the SEC is overstepping its boundaries and stifling innovation in the burgeoning crypto sector.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>TL;DR House Passes Bipartisan Bill: On May 8, the United States House of Representatives voted to pass a bipartisan bill, H.J. Res 109, which overturns the SEC\u2019s controversial Special Accounting Bulletin No. 121 (SAB 121). This guidance had effectively blocked banks from holding crypto assets on behalf of their customers. Controversial SEC Guidance: Introduced in &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"US House of Representatives Nullifies SEC Guidance Preventing Banks From Owning Crypto, Biden Threatens Veto\" class=\"read-more button\" href=\"https:\/\/crypto-economy.com\/us-house-of-representatives-nullifies-sec-guidance-preventing-banks-from-owning-crypto-biden-threatens-veto\/#more-165829\" aria-label=\"More on US House of Representatives Nullifies SEC Guidance Preventing Banks From Owning Crypto, Biden Threatens Veto\">Read more<\/a><\/p>\n","protected":false},"author":32,"featured_media":165831,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[88,84,74],"tags":[5437,4656,4816,4986],"_links":{"self":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/165829"}],"collection":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/users\/32"}],"replies":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/comments?post=165829"}],"version-history":[{"count":1,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/165829\/revisions"}],"predecessor-version":[{"id":165833,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/165829\/revisions\/165833"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/media\/165831"}],"wp:attachment":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/media?parent=165829"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/categories?post=165829"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/tags?post=165829"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}