This week, two pro-crypto bills passed in the House of Representatives, receiving praise from many lawmakers. However, there is a possibility that President Joe Biden may veto one of the bills, which has been highly regarded by industry advocates.
On May 23, the House presented a joint resolution to the President, urging the Securities and Exchange Commission (SEC) to revoke a rule that affects financial institutions engaged in crypto business. The bill, known as H.J.Res.109, aims to eliminate the SEC’s Staff Accounting Bulletin (SAB) No. 121. This rule requires banks to hold customers’ crypto on their balance sheets with sufficient capital against them.
President Biden had previously expressed his intention to veto the resolution on May 8. He argued that the legislation would unduly limit the SEC’s ability to establish appropriate regulations for crypto-assets and address future issues related to them.
However, the political landscape has since changed slightly in the span of two weeks. It remains unclear whether President Biden will consider recent developments in Congress when deciding whether to veto or sign the resolution into law.
On May 8, 21 Democrats in the House joined forces with Republicans to pass H.J.Res.109. A similar bipartisan outcome occurred in the Senate on May 16, with the resolution receiving 60 votes in favor and 38 against.
Before the House voted on the Financial Innovation and Technology for the 21st Century (FIT21) Act, the White House released a statement stating President Biden’s opposition to the bill, but without explicitly threatening a veto. The legislation, which is expected to move to the Senate soon, received support from over 70 Democrats and a majority of Republicans.
Moe Vela, a former Director of Administration for then-Vice President Biden, stated that H.J.Res.109 and its bipartisan support clearly reject the SEC’s vision for crypto regulation. Vela encouraged the Biden Administration to collaborate with the crypto industry in developing regulations and policies that are both consumer-friendly and supportive of the industry.
Within the next ten days, excluding Sundays, President Biden will reveal his decision regarding the bill. This is the maximum allowable time for him to sign or veto a bill. Coincidentally, the legislation reached his desk on the same day the SEC approved the listing and trading of spot Ether (ETH) exchange-traded funds on US exchanges for the first time.
In the face of crypto’s legal firepower, the SEC is now engaged in a fierce battle, reminiscent of Godzilla vs. Kong.