Moments ago, the Senate passed HJRes legislation. 109 that would void the SEC's Staff Accounting Bulletin (SAB) No. 121, preventing highly regulated financial firms from holding bitcoin and other cryptocurrencies. The legislation passed by a vote of 60 to 38, demonstrating bipartisan support for the measure.
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BREAKING: Legislation that would overturn SEC rule that prevents highly regulated financial companies from saving twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw”>#bitcoin and crypto APPROVES the Senate. pic.twitter.com/GDyJRCMCxy
– bitcoin Magazine (@BitcoinMagazine) twitter.com/BitcoinMagazine/status/1791146266849583480?ref_src=twsrc%5Etfw”>May 16, 2024
The resolution, which was already approved by the House last week, aims to dismantle SAB 121. This bulletin imposes strict restrictions on financial institutions, effectively preventing them from acting as custodians of digital assets like bitcoin. Pursuant to the Congressional Review Act, HJRes. 109 seeks to eliminate these obstacles, thus allowing highly regulated financial companies to offer custody services for bitcoin and other cryptocurrencies.
However, the White House has made its position clear on this legislation. A recent statement emphasized that if the bill reaches President Biden's desk, he will veto it. The administration maintains that repealing SAB 121 “would disrupt the SEC's work to protect investors in cryptoasset markets and safeguard the broader financial system.”
The defenders of HJRes. 109, however, argue that repealing SAB 121 is crucial to protecting consumers in the United States. Much of this is due to the batch of spot bitcoin exchange-traded funds (ETFs) approved for trading by the SEC earlier this year. Most of these bitcoins are held on behalf of a few institutions, posing centralization risks. HJRes. 109 seeks to remove barriers to allow more regulated institutions to custody and hold bitcoins on behalf of customers, helping to alleviate any concerns about centralization.
Critics of the SEC's SAB 121 argue that the rule is too restrictive and hinders the ability of financial institutions to meet the growing demand for bitcoin services. They believe that regulated institutions are well equipped to manage the risks associated with digital asset custody, given their existing compliance frameworks and security protocols.
Senator Cynthia Lummis, a strong supporter of bitcoin, urged support for repealing SAB 121 today, emphasizing that “SAB 21 is a rule under the administrative procedure law, disguised as accounting guidance. It was published by the SEC staff without the approval”. of the majority of the commission.”
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ONLY IN: US Senator Cynthia Lummis Urges Senate to Vote YES on Legislation That Would Allow Highly Regulated Financial Firms to Custody twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw”>#bitcoin and cryptography.
She also stated "The safest place for digital assets is a self-hosted wallet." pic.twitter.com/5WnGHZSNP3
– bitcoin Magazine (@BitcoinMagazine) twitter.com/BitcoinMagazine/status/1791130470928781798?ref_src=twsrc%5Etfw”>May 16, 2024
Senator Elizabeth Warren, however, urged the Senate to side with Joe Biden by voting against it, stating that this is a completely different asset class than what banks and other regulated financial institutions are used to. She said that digital assets are not something physical that banks can keep in a vault and that is completely online, therefore it is something that can be hacked, and cited the hacks of crypto exchanges Binance and FTX as her evidence.
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ONLY IN: US Senator Elizabeth Warren Urges Senate to Vote NO on Legislation That Would Allow Highly Regulated Financial Firms to Custody twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw”>#bitcoin and cryptography. pic.twitter.com/L6NwEVUseN
– bitcoin Magazine (@BitcoinMagazine) twitter.com/BitcoinMagazine/status/1791126734089109584?ref_src=twsrc%5Etfw”>May 16, 2024
Despite Senate approval, the future of HJRes. 109 remains uncertain due to the threat of a presidential veto. If President Biden follows through on his promise, he would halt progress on the resolution, maintaining the status quo regarding the custody of digital assets by financial institutions. Biden has the options to sign the bill into law, veto it, or do nothing. If he decides to do nothing, the bill will become law without his signature.
Fox Business journalist Eleanor Terrett commented on the news: x.com/EleanorTerrett/status/1791147604350468196″>indicating“The Senate voted to repeal SAB 121 which, as we all know, means this now goes to the President, who said last week that he plans to veto it. If so, then we're back to square one with the House and Senate, “We need a 2/3 majority vote in both chambers to override the veto.”
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