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Lawmakers push Biden to approve SAB 121 overturn to allow regulated financial firms to hold crypto

May. 31, 2024

Bipartisan lawmakers press Biden on SAB 121 veto.

An illustration of lawmakers on the steps of the US Capitol urging President Biden to not veto the SAB 121 Congressional Review Act.

House Financial Services Committee Chairman Patrick McHenry (R-NC) and Senator Cynthia Lummis (R-WY) led a letter urging President Joe Biden to reconsider vetoing the bipartisan Congressional Review Act (CRA) resolution overturning Securities and Exchange Commission (SEC) Staff Accounting Bulletin 121 (SAB 121). The SAB 121 makes it prohibitive for highly regulated financial firms to custody Bitcoin and crypto.

“Given the overwhelming bipartisan votes, we urge you to sign H.J. Res. 109 into law or work with the SEC to rescind the staff guidance,” stated the letter. “Rescinding SAB 121 is well within the SEC’s authority and there is ample precedent for revisiting a staff accounting bulletin.”

This CRA passed the Senate 60-38 and House 228-182. McHenry said it protects essential custody services and consumers. Senators Kirsten Gillibrand (D-NY), Representatives French Hill (R-AR), Ritchie Torres (D-NY), and others also urged regulators to state SAB 121 is unenforceable after the Government Accountability Office deemed it a rule under the CRA.

On November 15, McHenry, Lummis, Flood, Nickel, Gillibrand, Hill, and Torres made this argument to federal regulators. On February 1, Lummis, Flood, and Nickel introduced the bipartisan CRA.

As reported by Crypto Briefing, a veto from Biden was almost certain, after the US President expressed his intentions, citing the need to protect investors and the financial system. Should a presidential veto occur, Congress would need a two-thirds majority to override it.

However, recent developments in the US regulatory landscape might increase the chances of Biden deciding not to veto the bill. According to Bloomberg ETF analyst Eric Balchunas, the sudden stance shift seen by SEC towards a spot Ethereum ETF approval was motivated by “political issues.”

Moreover, presidential candidate Donald Trump has recently displayed a crypto-friendly approach in his campaign, and Biden might want to stay on the good side of this electorate share.

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