{"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":"
TL;DR<\/span><\/p>\n The United States House of Representatives has taken a significant step in the ongoing battle over\u00a0<\/span>cryptocurrency\u00a0<\/span><\/a>custody regulations.\u00a0<\/span><\/strong>On May 8, the House voted to pass a bipartisan\u00a0<\/span>bill<\/span><\/a>, H.J. Res 109,\u00a0<\/span>which overturns<\/span>\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><\/p>\n Introduced by the SEC in March 2022,\u00a0<\/span>SAB 121 outlined accounting guidelines for institutions looking to custody crypto assets.\u00a0<\/span><\/strong>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>seen as<\/span>\u00a0cost-prohibitive and unfair for banks seeking to provide custodial services for digital assets.<\/span><\/p>\n The bill to overturn SAB 121 received bipartisan support,\u00a0<\/span><\/strong>with 21 Democrats joining unanimous Republican votes to pass it by a margin of 228 votes to 182.\u00a0<\/span><\/p>\n Republican Congressman Mike Flood<\/span>, who<\/span>\u00a0introduced the resolution<\/span>,\u00a0<\/span>emphasized that custodial assets should be<\/span><\/strong>\u00a0<\/span>\u201calways considered off-balance sheet.\u201d<\/span><\/em><\/strong>\u00a0The resolution aims to remove roadblocks preventing highly regulated financial institutions from acting as custodians of digital assets.<\/span><\/p>\n However, President Joe Biden has expressed his opposition to the bill.\u00a0<\/span>In a statement,<\/span>\u00a0the White House said it\u00a0<\/span>\u201cstrongly opposes\u201d<\/span><\/em>\u00a0overturning SAB 121,\u00a0<\/span><\/strong>arguing that it would disrupt the SEC\u2019s efforts to protect investors in\u00a0<\/span>crypto<\/span><\/a>-asset markets and safeguard the broader financial system.<\/span>\u00a0Despite the House\u2019s approval, President Biden has threatened to veto the bill if it reaches his desk.<\/span><\/p>\n The House Financial Services Committee (HSFC) hailed the resolution<\/span><\/strong>\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 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 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 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":" 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 … <\/p>\n\n
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\n<\/li>\n<\/ul>\nThe SEC\u2019s Controversial Guidance<\/span><\/h2>\n
House of Representatives Bipartisan Support and Presidential Veto Threat<\/span><\/h2>\n
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Implications and Industry Response<\/span><\/h2>\n