The recent vote in the US House of Representatives regarding HJ Res. 109 to rescind SEC Staff Accounting Bulletin (SAB) 121 ended in a disappointing outcome. While 228 House members voted in favor of ending SAB 121, 184 voted against the resolution and 21 abstained. This majority support was still insufficient to overturn the bulletin, falling short of the required two-thirds vote threshold necessary to counter a presidential veto.
It was reported that several Democrats changed their stance on the issue since a previous vote in May. Dean Phillips, Mikie Sherrill, and Marc Veasey switched their votes to oppose the end of SAB 121, while Jonathan Jackson, Ro Khanna, Tom Suozzi, and Shri Thanedar changed their votes in favor of rescinding the bulletin. Additionally, Republican Drew Ferguson altered his vote from no to yes. This shift in positions highlighted the divided opinions within the House regarding SAB 121.
Representative Mike Flood, the original proponent of the resolution, expressed his disappointment with the failed vote. He emphasized his commitment to finding alternative ways to end SAB 121, criticizing it as a hindrance to the development of digital financial services. Flood argued that the bulletin was a regulatory overreach by the SEC, limiting banks’ participation in digital asset custody.
House Financial Services Committee Chairman Patrick McHenry condemned President Biden’s veto of the resolution, accusing the administration of prioritizing bureaucratic power over the interests of the American people. The Blockchain Association and the American Banking Association also voiced their opposition to SAB 121, citing its negative impact on banks’ ability to offer digital asset custody services and participate in the cryptocurrency market.
Despite the setback in the House vote, supporters of overturning SAB 121 remain determined to continue their efforts. The Blockchain Association indicated that it would explore various avenues in Congress and the courts to challenge the bulletin’s restrictions. The American Banking Association reiterated its support for rescinding SAB 121, emphasizing the need to remove barriers hindering banks from engaging in digital asset custody activities.
The battle over SEC Staff Accounting Bulletin 121 reflects the ongoing debate surrounding the regulation of digital assets and financial services. The divided opinions within the House and the strong reactions from industry associations highlight the complexity of the issue and the challenges involved in achieving consensus on regulatory measures in this rapidly evolving sector.
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