REGULATION

Will President Biden vote against the repeal of the anti-encryption rule SAB121, which is supported by the U.S. House and Senate?

share
Will President Biden vote against the repeal of the anti-encryption rule SAB121, which is supported by the U.S. House and Senate?

According to a report from The Block, the U.S. Senate has voted to repeal SEC's anti-cryptocurrency rule SAB121, which sparked significant debate over accounting requirements for cryptocurrency custodians. With approval from both the Senate and the House, the bill will now be sent to President Biden's desk, with the White House previously indicating the possibility of using a veto.

Controversy Surrounding "Custodial Accounting," Both Houses of Congress Oppose

SAB121 was first issued in 2022 with strict regulations that drew criticism from the industry. These requirements compel companies holding customers' cryptocurrency to list these assets as liabilities, a move many in the crypto industry believe could hinder banks from participating in the cryptocurrency custodial market.

The House of Representatives voted on 5/8 to repeal SAB121 with a result of 228 to 182. Now, the Senate has also passed it with a vote of 60 to 38, aiming to repeal this stringent anti-cryptocurrency rule.

"Custody Should Be Treated as a Company Liability" U.S. House of Representatives Passes SEC Cryptocurrency Accounting Rule, Industry Pushes Back

President Biden Still Has the Opportunity to Veto

However, the joint rejection by both houses is not a done deal. The bill will be sent to President Biden's desk, and the White House has previously indicated a potential veto, expressing concerns that weakening the SEC's regulatory authority over crypto assets could lead to "significant financial instability and market uncertainty."

According to The Block, if Biden casts a veto, with the current votes in both houses, a two-thirds majority would be needed to override the veto, presenting a challenging hurdle. Biden will have ten days to make a decision.