Overview of Reconsideration of SEC Directive Overturning Bill
The U.S. House of Representatives is scheduled to reconsider a bill aimed at overturning a contentious Securities and Exchange Commission (SEC) directive that critics claim hampers crypto companies from collaborating with banks. House Majority Leader Steve Scalise has slated the bill, previously vetoed by President Joe Biden in May, for reconsideration on July 9 or later.
Challenges in Overriding President Biden’s Veto
Although the measure had previously passed both the House and Senate with bipartisan support, achieving the two-thirds majority needed to override Biden’s veto may be challenging. The SEC issued Staff Accounting Bulletin No. 121 (SAB 121) in March 2022, advising financial institutions that hold crypto on behalf of customers to include those assets on their balance sheets as if they owned them.
Controversy Surrounding SAB 121 and Its Impact
The guidance was criticized for discouraging investment banks and other traditional financial entities from providing crypto custody services on a large scale. House majority whip Tom Emmer even called SAB 121 “illegal” and a “violation” of the SEC’s statutory mission. Despite the controversial nature of SAB 121, there was sufficient bipartisan support for the measure to pass through Congress.
