Joint Resolution 109 was passed by the US Senate Thursday, which attempts to repeal Staff Accounting Bulletin 121 of the Security and Exchange Commission. This legislation is now headed to the desk of President Joe Biden, where it will likely be vetoed.
Twelve Democratic Senators voted in favor to pass the resolution Thursday: Kirsten Gillibrand of New York, John Hickenlooper of Colorado, Gary Peters of Michigan, Jon Tester of Montana, Kyrsten Sinema of Arizona, Mark Kelly of Arizona, Jacky Rosen of Nevada, Bob Casey of Pennsylvania, Cory Booker of New Jersey, Ben Ray Luján of New Mexico, Ron Wyden of Oregon and Majority Leader Chuck Schumer of New York.
SAB 121 was introduced in March of 2022, and enacted that month. It states digital asset custodians must report a financial liability. “corresponding assets” The SEC staff said that the practice is intended to guard against the misuse of cryptocurrencies. SEC staff stated that the practice was intended to safeguard against cryptocurrency fraud. “significant risks and uncertainties associated with safeguarding crypto assets.”
Last week, in the Republican-controlled House, 21 Democrats voted in favor of passing the resolution. White House officials said that last week if the bill reached President Joe Biden, he’d veto.
“SAB 121 was issued in response to demonstrated technological, legal and regulatory risks that have caused substantial losses to consumers,” The Biden Administration wrote a press release. “By virtue of invoking the Congressional Review Act, it could also inappropriately constrain the SEC’s ability to ensure appropriate guardrails and address future issues related to crypto assets including financial stability.”
Once the document reaches his desk, he has 10 days to sign it off or veto, except on Sundays.
Rep. Wiley Nickel of N.C. who is a cosponsor, requested that SEC Chair Gary Gensler repeal SAB 121 in advance of the Senate’s vote.
You can read more in our opinions section. SAB 121 must be overturned.
“Today’s Senate vote to repeal SAB 121 sends a clear bipartisan message: Congress will not stand idly by as Gary Gensler and the SEC deliberately sidestep the statutory rulemaking process and overstep their regulatory authority,” Nickel made the statement on Thursday.
Blockworks’ initial request for comment from the SEC wasn’t immediately answered.
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