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Senate Approves Rescission of SEC Cryptocurrency Custody Bulletin
The US Senate has passed a measure to overturn an SEC bulletin on cryptocurrency custody standards, and is now awaiting an expected veto from President Joe Biden.
That of the Senate vote it ended Thursday with a 60-38 majority, less than the two-thirds needed to override a veto. Several Democrats supported the resolution, including Senate Majority Leader Chuck Schumer of New York.
The legislative action mirrors a similar move that occurred last week in the House, where the measure passed by a vote of 228-182. Although mostly supported by Republicans, 21 Democrats also voted in favor, indicating that bipartisan support is nevertheless insufficient to overcome a veto.
The contested SEC Staff accounting bulletin, called SAT 121was first issued in 2022. It requires companies that handle cryptocurrencies to list customer holdings as liabilities, a requirement that has sparked debate and opposition within the cryptocurrency industry. Critics argue that such regulations could dissuade banks from safeguarding digital assets.
“Revoking the SEC’s regulatory authority over crypto-assets would introduce substantial financial instability and uncertainty into markets,” the White House said, expressing its intent to support the bulletin.
Cody Carbone, vice president of policy at the Digital Chamber of Commerce, criticized the potential veto.
“A veto would be senseless,” Carbone said, urging the President to recognize the resolution’s bipartisan support not as a criticism but as a consensus in prioritizing consumer protections over regulatory bias.
Under the Congressional Review Act (CRA), which allows Congress to review and overturn agency rules, the SEC bulletin could be overturned. The Government Accountability Office last year identified SAB 121 as a rule subject to this law, contradicting the SEC’s position that it does not qualify as such.
Ron Hammond, Director of Government Relations at the Blockchain Associationcommented on the possibilities of the resolution, noting that a presidential veto is expected.
“This is not shocking, however, as a number of CRAs during Biden’s tenure came to his desk on a bipartisan basis and were vetoed,” Hammond said.
Hammond also highlighted the growing engagement from grassroots sectors and industry in discussions on the topic cryptographic regulations in Washington, DC