The recent vote in the US House of Representatives regarding SEC Staff Accounting Bulletin (SAB) 121 has sparked controversy and debate among lawmakers. With 228 House members voting to end SAB 121, 184 voting against the resolution, and 21 abstaining, the outcome fell short of the two-thirds majority needed to override President Joe Biden’s previous veto. Fox Business reporter Eleanor Terrett highlighted the shift in votes from several Democrats since the previous vote in May, showcasing the political maneuvering at play.
Changing Stances
Notable members such as Dean Phillips, Mikie Sherrill, and Marc Veasey altered their votes to oppose the end of SAB 121, while others like Jonathan Jackson, Ro Khanna, Tom Suozzi, and Shri Thanedar changed their votes in favor of rescinding the regulation. Even Republican Drew Ferguson switched his vote from no to yes. This back and forth demonstrates the complexity of the issue and the differing perspectives within the House.
Following the failed vote, Representative Mike Flood expressed his determination to explore alternative paths to end SAB 121, emphasizing the importance of removing barriers to digital financial growth. Flood criticized SAB 121 as a “bad regulation” that hinders banks from participating in digital asset custody, accusing the SEC of overstepping its bounds in regulating bank policy. House Financial Services Committee Chairman Patrick McHenry condemned President Biden’s veto, accusing the administration of prioritizing bureaucracy over the interests of the American people.
Various organizations, including the Blockchain Association and the American Banking Association, have voiced their opposition to SAB 121. The Blockchain Association intends to challenge the SEC rule through congressional and legal avenues, aiming to eliminate the restrictions it imposes. The American Banking Association raised concerns about the impact of SAB 121 on banks, noting that it limits their ability to offer digital asset custody services and engage with Bitcoin ETFs and tokenization. The association expressed support for overturning SAB 121 to facilitate innovation and growth in the banking sector.
The recent House vote on SAB 121 reflects the division and complexity surrounding regulatory issues in the financial sector. While efforts to rescind the regulation have so far fallen short, the debate continues as lawmakers, industry stakeholders, and advocacy groups navigate the path forward in shaping the future of digital asset custody and banking regulations.
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