Senate Votes to Repeal SEC Crypto Rule

The U.S. Senate joined the House of Representatives in voting to approve a resolution to overturn the SEC's controversial crypto accounting policy, SAB 121. All eyes turn now to President Biden, who has previously said he would veto the resolution.

What’s the scoop?

• In a 60-38 vote, the Senate just moved to repeal the SEC’s Staff Accounting Bulletin No. 121 (SAB 121), a policy requiring firms that custody crypto to record customer holdings on their balance sheets as liabilities. 
• With Republicans leaning harder into pro-crypto positions lately, it’s notable that a dozen Democrats, including Senate Majority Leader Chuck Schumer (D-N.Y.), voted against SAB 121, reflecting bipartisan opposition to the policy. 
• In a recent statement, President Biden said he would veto the resolution as it could “constrain the SEC’s ability to ensure appropriate guardrails and address future issues related to crypto-assets.”

Bankless take:

This vote is notable for many reasons. It’s the first crypto bill to pass both houses of Congress. It’s a big win for the space against an increasingly hawkish SEC. It shows growing bipartisan interest in shaping crypto policy. Plus, it offers President Biden, increasingly seen as unfriendly to crypto, a chance to sign a pro-crypto bill into law.

The grand question now is whether President Biden will relent on his veto promise. Of course, his appetite may have dwindled upon high-profile Democrats coming out in favor of the resolution, and Senate Majority Leader Chuck Schumer has the President’s ear, so he may back down. If President Biden does veto the resolution, look for his legacy on crypto to take another big hit and for potential override attempts in Congress in the coming months.