U.S. Senate Votes to Kill SEC’s Crypto Accounting Policy, Testing Biden’s Veto Threat

Twelve Democrats joined forces with most Republicans, resulting in a sizable coalition that approved the resolution comfortably beyond the required majority of votes. Nevertheless, the resolution fell short of attaining the two-thirds vote threshold necessary to render it immune from a potential presidential veto.

Senator Chuck Schumer, the Democratic Majority Leader in the Senate from New York, went against the wishes of his party’s leader by opposing the Securities and Exchange Commission (SEC) on their cryptocurrency initiative, joining other influential Democrats in this stance.

In 2022, the Securities and Exchange Commission (SEC) released SAB 121, stating that a company handling a customer’s cryptocurrencies must report these assets on their balance sheet. This ruling could significantly impact banks dealing with crypto clients in terms of capital requirements. Republican legislators criticized the SEC for implementing this policy without following due rulemaking procedures, and the Government Accountability Office concurred, determining that the regulator had mishandled what should have been a rule rather than staff advice.

financial stability.”

As a researcher studying the regulatory landscape of cryptocurrencies, I can tell you that this recent development is significant because it represents the first concrete legislative action taken by Congress specifically addressing the crypto industry. While there have been previous attempts at crypto-related regulations, this new provision was intentionally designed to support and foster growth within the sector. Despite opposition from the industry during the infrastructure law debate, it managed to make its way into the legislation.