Cryptocurrencies

The House of Representatives voted to repeal the SEC’s Anti-Cryptocurrency Banking Guidance (SAB 121).

The House of Representatives voted to repeal the SEC’s Anti-Cryptocurrency Banking Guidance (SAB 121).US House of Representatives has voted to pass a bill repealing the controversial SEC guidance that prevents banks from owning cryptocurrencies.

The House Of Representatives Voted To Repeal The Sec'S Anti-Cryptocurrency Banking Guidance (Sab 121).
The House Of Representatives Voted To Repeal The Sec’S Anti-Cryptocurrency Banking Guidance (Sab 121).

 

However, President Joe Biden previously warned earlier in the day that he would veto the new bill if it reached his desk.

On May 8, the House voted to pass a bipartisan bill dubbed HJ Res 109 that repeals the SEC’s Special Accounting Bulletin (SAB 121) that requires banks to hold their clients’ cryptocurrency assets on their balance sheets — which is not the case. For traditional assets. Such as securities.

Republican Congressman Mike Flood — the lawmaker who introduced the resolution — said SAB 121 was unfair to banks looking to custodial cryptocurrencies, as custodial assets are “always considered off-balance sheet.”

Notably, 21 Democrats voted in favor of the bill — which joined 207 unanimous votes from Republicans — leading to the bill’s passage by a vote of 228 to 182.

Although the bill passed the House of Representatives, President Joe Biden stated that he would veto the new bill.

In a statement issued on May 8, the White House said it “strongly opposes” House members seeking to repeal SAB 121, claiming that it would hinder the SEC’s efforts to “protect investors in crypto asset markets and protect the broader financial system.” “.

Limiting the SEC’s ability to maintain a comprehensive and effective financial regulatory framework for cryptoassets would lead to significant financial instability and market uncertainty.

The House Of Representatives Voted To Repeal The Sec'S Anti-Cryptocurrency Banking Guidance (Sab 121).

SAB 121 was introduced by the SEC in March 2022, and sets out the regulator’s accounting guidelines for institutions looking to hold crypto assets. Notably, SAB 121 effectively prohibits banks from holding crypto assets on behalf of clients.

US lawmakers, including SEC Commissioner Hester Peirce, have argued that SAB 121 jeopardizes the willingness of regulated banks to act as custodians for cryptocurrencies and treats crypto holdings differently from other assets.

“By repealing SAB 121, our bipartisan resolution ensures that consumers are protected by removing barriers that prevent highly regulated financial institutions and companies from serving as custodians of digital assets,” the House Financial Services Committee (HSFC) wrote in a May 8 statement.

“Staff Accounting Circular 121 is one of the most striking examples of the regulatory overreach that has defined Gary Gensler’s tenure at the SEC,” said Patrick McHenry, Chairman of the Board of Directors of HSFC.

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