U.S. House passes bill to overturn controversial SEC accounting bulletin
The House of Representatives has voted to pass a bill to overturn a controversial Securities and Exchange Commission bulletin that sets specific accounting standards for companies that store cryptocurrencies.
The House voted 228 to 182 on Wednesday, with most Republicans in favor of the bill. 21 Democratic lawmakers voted in favor.
that much circularThe book, first published in 2022, sparked controversy in the cryptocurrency industry last year over concerns it could hinder banks from safeguarding digital assets. This requires companies that store cryptocurrency to record their customers’ cryptocurrency holdings as liabilities on their balance sheets.
It is unclear whether the bill will become law. On Wednesday, the White House issued an “Executive Policy Statement” that President Joe Biden would veto.
“Limiting the SEC’s ability to maintain a comprehensive and effective financial regulatory framework for crypto assets would result in significant financial instability and market uncertainty,” the White House said.
House Financial Services Committee Chairman Patrick McHenry, R-N.C., said during a House session Wednesday morning that the notice requires banks to assume “substantial amounts of capital and liquidity.”
“This inherently makes it more expensive for financial institutions to manage their customers’ digital assets,” McHenry said.
Rep. Mike Flood, R-Neb., who introduced the resolution along with Rep. Wiley Nickel, D-N.C. Earlier this year, the board said it was “changing”. In remarks released Wednesday morning, it said its governance practices for banks “keep them out of the market.”
Maxine Waters, D-Calif., the committee’s Democratic leader, accused the bill’s sponsors on the House floor earlier Wednesday of undermining the SEC.
“This bill takes a sledgehammer to solve a problem that could almost require a scalpel,” Waters said. By providing transparency, SAB 121 helps prevent fraud that led to the collapse of cryptocurrency companies such as cryptocurrency exchange FTX, he added.
Waters also warned that reversing the notice could result in future SEC restrictions.
“If this resolution passes, the SEC will be prohibited from issuing any guidance substantially similar to this resolution, including public guidance on this matter in the future,” Waters said.
next stage
The bill will be referred to the Senate Banking Committee and then could be voted on before the full Senate. Sen. Cynthia Lummis (R-Wyo.) also has a companion bill in the Senate.
Cody Carbone, vice president of policy at the Digital Chamber of Commerce, said he expects SAB 121 to pass in the Senate.
“I hope this passes with broad bipartisan support because it’s more about consumer protection and process than encryption, but it’s still DC,” Carbone told The Block. He added that there could be a committee vote and a floor vote before lawmakers recess in August.
Last October, the Government Accountability Office (GAO) said the notice covers: Congressional Review Act, which requires the agency to submit a report to Congress on the rules. Enacted in 1996, the CRA aims to strengthen congressional oversight of agency rulemaking.
“Under the Congressional Review Act, it only needs 51 votes to pass rather than the traditional 60. I’m optimistic that there will be several Democrats supporting this,” Carbone said.
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