The US House of Representatives is scheduled to vote on significant crypto legislation on Wednesday, July 10. This vote might override President Joe Biden’s veto of the Securities and Exchange Commission’s (SEC) resolution to repeal Staff Accounting Bulletin 121 (SAB 121). In June, Biden vetoed this bill. It has garnered significant attention due to its impact on the custody of Bitcoin and other crypto assets by financial institutions.
The SEC issued SAB 121 in 2022, which mandates that banks holding cryptocurrency must disclose these assets as liabilities on their balance sheets. Many in the crypto industry have questioned this accounting treatment, claiming that the additional regulatory burden deters banks and other institutional actors from dealing with digital assets.
D-Day For Crypto
The House initially passed the resolution opposing SAB 121 in early May with a vote of 228-182, supported by 21 Democrats alongside unanimous Republican backing. President Biden vetoed the resolution anyways. This led to the scheduling of a veto override vote, which requires a two-thirds majority in both the House and Senate to pass.
Ron Hammond of the Blockchain Association highlighted the unusual political dynamics at play, noting that “crypto has now found itself to be a campaign issue.” He underscored the bipartisan nature of the previous votes and pointed out the uphill battle ahead, saying, ” this effort is a tough uphill climb as only 21 Ds in May joined all the Rs in support (drastically below the 2/3 threshold needed).”
Perianne Boring from the Digital Chamber added urgency to the discussion, stressing the necessity for more Democratic support: “The bill to nullify SAB 121 is back for a vote in the House this week after POTUS veto on May 31st. This constitutionally mandated vote requires a 2/3 majority to override the veto. We need around 60 more House Democrats to support our bill to end SAB 121.”
Other Ways
In response to the challenges of overturning the veto, discussions among lawmakers have also included alternative legislative strategies. Eleanor Terrett of Fox Business revealed via X, “I’m told by a Dem staffer familiar with the thinking of the House leads that they do not expect many Democrats to change their votes on Wednesday. They see a better pathway to overriding SAB 121 through HR 5741 – Uniform Treatment for Custodial Assets Act – a bipartisan bill introduced by US Rep Mike Flood and cosponsored by Rep French Hill, Wiley Nickel, and Ritchie Torres that addresses the accounting treatment of digital assets.”
Furthermore, the House Appropriations Committee has proposed a policy rider in its budget bill that would restrict the SEC from using funds to implement SAB 121, illustrating another approach to modify the regulatory environment for crypto custody.
At press time, Bitcoin traded at $57,371.
