The office of United States President Joe Biden has released a statement declaring that his administration intends to veto a joint resolution affecting crypto policy at the Securities and Exchange Commission (SEC) if it reaches his desk.
In a statement issued on May 8, the White House expressed strong opposition to members of the House of Representatives who are attempting to pass a joint resolution that would disrupt the SEC’s efforts to protect investors in crypto-asset markets and ensure the stability of the broader financial system. The resolution in question, H.J.Res. 109, was introduced in the House in February and aims to overturn the SEC’s Staff Accounting Bulletin (SAB) No. 121. This bulletin requires banks to include customers’ digital assets on their balance sheets and maintain capital against them.
The Biden administration stated, “SAB 121 was issued in response to demonstrated technological, legal, and regulatory risks that have caused substantial losses to consumers. By invoking the Congressional Review Act, it could also unreasonably limit the SEC’s ability to establish appropriate regulations and address future issues related to crypto-assets, including financial stability. Restricting the SEC’s ability to maintain a comprehensive and effective financial regulatory framework for crypto-assets would introduce significant financial instability and market uncertainty.”
Democratic and Republican leaders from the House Financial Services Committee expressed their opinions on the resolution during a session on May 8. Republican Representative Patrick Henry urged lawmakers to support H.J.Res. 109, stating that SAB 121 allowed the SEC to dictate how financial institutions and firms protect Americans’ digital assets. Representative McHenry supported this viewpoint, stating, “If you want Americans to be able to engage with digital assets safely and securely, banks, which are some of the most regulated businesses in our country, are probably the best way.”
On the other hand, Democrat Representative Maxine Waters, the ranking member of the House committee, opposed the joint resolution, arguing that the SEC accounting rule provided greater transparency in the digital asset space. She reiterated the SEC’s claim that the rule was designed to address the unique risks and uncertainties associated with cryptocurrencies and criticized McHenry’s efforts as harmful and partisan. Representative Waters said, “This kind of transparency helps prevent the kind of fraud and mishandling of crypto assets that led to the collapse of major crypto companies like FTX.”
After undergoing consideration in the House, H.J.Res. 109 initially appeared to pass through a voice vote. However, Representative McHenry requested a count of the yeas and nays. The House chair postponed further proceedings on the resolution until a later time. According to the U.S. Constitution, the House could override President Biden’s veto with a two-thirds majority vote.
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