The office of United States President Joe Biden has released a statement declaring that his administration intends to veto a joint resolution concerning 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 maintain the stability of the broader financial system. The resolution in question, H.J.Res. 109, was introduced in the House in February and seeks 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 implemented in response to proven technological, legal, and regulatory risks that have resulted in significant losses for consumers. By invoking the Congressional Review Act, it could also unduly 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 shared their perspectives on the resolution during a session on May 8. Representative Patrick Henry, a Republican, urged lawmakers to support H.J.Res. 109, arguing that SAB 121 allowed the SEC to dictate how financial institutions and firms safeguard digital assets of American citizens. Representative McHenry added, “If we want Americans to safely and securely engage with digital assets, banks—some of the most regulated businesses in our country—are probably the best way.”
Representative Maxine Waters, a Democrat and ranking member of the House committee, opposed the joint resolution, asserting that the SEC accounting rule promoted greater transparency in the digital asset space. She reiterated the SEC’s claim that the rule was designed to address unique risks and uncertainties associated with cryptocurrencies and criticized McHenry’s efforts as harmful and partisan. Representative Waters stated, “This kind of transparency helps prevent fraud and mishandling of crypto assets, which have led to the collapse of major crypto companies like FTX.”
After discussions in the House, where H.J.Res. 109 appeared to pass through a voice vote, 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.
Magazine:
U.S. enforcement agencies are intensifying their efforts to combat crypto-related crime.