Congress Approves Major Crypto Law to Reverse SEC’s SAB 121

joe biden usa

The U.S. Congress recently passed a bill to reverse SEC’s Staff Accounting Bulletin No. 121, which currently mandates financial institutions to classify crypto assets as liabilities. However, President Biden has indicated he may veto the bill, underscoring his administration’s firm position on cryptocurrency regulation.

The U.S. Congress has approved a bill aimed at changing SEC’s Staff Accounting Bulletin No. 121 (SAB 121). This legislation, which focuses solely on cryptocurrency, aims to overturn the rule that currently categorizes crypto assets as liabilities on financial statements.

U.S. Congress Takes Aim at SEC’s Crypto Asset Rule

Last week, the U.S. Congress passed legislation under the Congressional Review Act (CRA) with the aim of repealing SEC’s Staff Accounting Bulletin No. 121 (SAB 121). This bill mandates that financial entities holding crypto assets for clients must recognize these assets and their corresponding liabilities at fair value on their financial statements.

Critics argue that this requirement imposes substantial financial burdens on financial institutions, potentially dissuading them from offering custody services for crypto assets.

Senator Cynthia Lummis (R-WY) celebrated the Senate’s decision on social media, framing it as a significant advancement for financial innovation. She portrayed the legislative move as a direct response to what she perceives as the Biden administration’s and SEC Chair Gary Gensler’s tough stance on cryptocurrency regulation.

This legislative effort marks a milestone as the first targeted solely at cryptocurrency regulation. Meanwhile, House Financial Services Committee Chair Patrick McHenry (R-NC) echoed similar concerns, asserting that SAB 121 creates a formidable barrier for financial entities.

Centered JavaScript

McHenry criticized the rule as emblematic of regulatory overreach under Gensler’s leadership at the SEC, arguing that it makes handling crypto assets prohibitively expensive for financial firms.

President Biden’s Opposition to Crypto Legislation

President Joe Biden has taken a firm stance against recent crypto legislation, indicating potential plans for a veto. The White House issued a statement expressing concerns that diminishing the SEC’s regulatory authority could result in significant financial instability and market uncertainty.

Earlier this month, the U.S. House of Representatives initially voted to overturn SEC’s Staff Accounting Bulletin No. 121 (SAB 121), followed by the Senate’s approval last week.

President Biden’s opposition to crypto extends beyond legislative actions. His proposed financial measures outlined in the recent budget include a crypto mining tax and a ‘wash sale’ rule targeting digital assets. These moves underscore Biden’s cautious approach to cryptocurrency regulation amidst broader financial policy discussions.

Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.


Join Cryptos Headlines Community

Follow Cryptos Headlines on Google News


  • Asad

    Asad is a dynamic and talented cryptocurrency content author who brings a wealth of knowledge and enthusiasm to every article. With a deep understanding of blockchain technology and a passion for digital assets, Asad's writing is both informative and engaging.

    View all posts

Leave a Reply

Your email address will not be published. Required fields are marked *