In May, US President Joe Biden vetoed the SAB 121. This week the U.S. House votes on the controversial bill. What will be the final verdict?
The U.S. House of Representatives is scheduled to vote on a resolution to overturn the Securities and Exchange Commission’s Staff Accounting Bulletin 121 (SAB 121) in the coming week.
SAB 121 has been a source of contention, particularly within the cryptocurrency industry.
But, what is it?
What is SAB 121?
SAB 121, a rule set by the Securities and Exchange Commission in 2022, impacts companies that hold cryptocurrency assets on behalf of their users. This includes platforms like crypto exchanges.
The bill focuses on how these companies account for their responsibility to keep those crypto assets safe. Essentially, SAB 121 requires companies to acknowledge this safeguarding duty in their financial statements by recording a liability. To balance this liability, they can also record an asset reflecting the current value of the cryptocurrency they’re holding for users.
This is supposed to increase transparency for investors by highlighting the risks and value associated with safeguarding cryptocurrency.
The House is expected to vote on a resolution to overturn the SEC’s Staff Accounting Bulletin 121 (SAB 121) next week, according to the schedule released by House Majority Leader Steve Scalise. The Constitution requires the House to hold a vote on the resolution despite President Biden’s veto in May.
During the initial vote in May, the House passed the measure with bipartisan support (228-182), with most Republicans and 21 Democrats in favor. The Senate later followed suit with a 60-38 vote, with a few Democrats, including Senate Majority Leader Chuck Schumer, joining the majority.
However, overriding a presidential veto requires a two-thirds majority in both chambers of Congress, a challenge industry experts like Alexander Grieve of Paradigm acknowledge.
Similarly, Cody Carbone, vice president of policy for the Chamber of Digital Commerce has expressed:
“I think it’s unlikely to pass given the uphill battle in terms of numbers needed to override the veto.”
Securing enough votes to override the veto is seen as a difficult task by Carbone. To succeed, the House would need 290 votes, a significant increase from the 228 who initially supported the measure. Carbone believes obtaining the additional 60 votes within a week is improbable. While the proposed action aims for consumer protection and good governance, Carbone predicts it will ultimately fail.
