Regulation

House Vote on SEC SAB 121 Postponed After Biden Letter

Published

4 months ago

July 11, 2024

Coin2049 Newsletter

The House of Representatives has delayed the vote to override President Biden’s veto on the SEC’s anti-crypto rule, SAB 121, after allegedly receiving a dramatic letter from President Biden.

House Vote on SEC SAB 121 Postponed

The House vote to override President Biden’s veto on the SEC’s Staff Accounting Bulletin No. 121 (SAB 121) has been postponed. Initially set for Wednesday, July 10, the vote will now occur on Thursday, July 11, at approximately 10:30 AM.

The delay occurred after President Biden allegedly sent a letter to the House, which prompted the postponement of the vote. The content of the letter is still unknown.

🚨NEW: The House has just moved this vote to tomorrow due to the fact that it now has to hold a debate on a completely different topic.

The vote on H.J. Res. 109 is now scheduled for around 10:30AM on Thursday, July 11th. https://t.co/UL34fJLF9A

— Eleanor Terrett (@EleanorTerrett) July 10, 2024

Representative Patrick McHenry, who has publicly spoken against the SEC’s rule, showed his concern and annoyance at the delay. McHenry claimed that the rule is anti-crypto since it forces companies storing cryptocurrencies for clients to book these assets as liabilities on their balance sheets. He said, “We should not be doing business this way.”

Background on SAB 121

Released in 2022, the SAB 121 by the SEC is a set of tough accounting standards for companies that deal with cryptocurrencies. Opponents of the rule, including some of the most active members of the cryptocurency community, state that the rule hampers business development and adds excessive regulation to the market.

The rule requires firms to recognize crypto assets as liabilities, a move that is perceived to hinder the expansion of crypto custodian services to other traditional financial institutions.

The House and Senate had earlier on approved a motion to repeal SAB 121 with bipartisan support. However, President Biden vetoed the resolution, and hence the current push to counter his veto. This delay has a ripple effect on the ongoing discourse on cryptocurrency regulation in the United States. President Biden’s letter influenced some of the lawmakers, raising concerns on the possibility of the lawmakers having enough votes to counter the veto.

A two-thirds vote is needed to override a presidential veto in the House of Representatives, and this is quite difficult considering the current political situation.

Some of the sources indicate that many Democrats who propelled the repeal may now be in support of Biden especially with the impending elections.

Political and Market Reactions

The postponement of the vote has caused different reactions from the stakeholders. A recent poll found that Republican voters have a positive perception of cryptocurrency and prefer laws that are clearly defined by their elected officials instead of regulatory agencies.

In the meantime, the Biden administration’s position regarding the retention of SAB 121 is a clear indication that the cryptocurrency market will remain closely monitored. This position might hamper the market sentiment as well as the confidence of the investors in the crypto space.

The House will reconvene on Thursday to address this critical issue, with all eyes on whether the veto can be successfully overridden or if President Biden’s position will prevail.