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House Fails to Override Biden’s Veto on SEC Crypto Rule

The US House of Representatives fell 60 votes short of the two-thirds majority needed to override President Biden’s veto on an SEC rule regarding banks handling cryptocurrency. This decision could limit US banks from acting as crypto custodians unless new legislation is introduced.

1 min 50 secJuly 11, 2024
House Fails to Override Biden’s Veto on SEC Crypto Rule

The US House of Representatives could not muster enough support to override President Joe Biden’s veto of a resolution impacting a Securities and Exchange Commission (SEC) rule. This rule mandates that banks record cryptocurrency holdings as liabilities on their balance sheets.

 

On July 11, 228 House members voted to overturn Biden’s veto. They fell 60 votes short of the required two-thirds majority. This failure means that the SEC's Staff Accounting Bulletin (SAB) No. 121 remains in effect. It restricts US banks from serving as crypto custodians for their customers unless future legislation changes the rule.

 

 

H.J.Res. 109 passed the House initially on May 8 with a vote of 228 to 182. 21 Democratic representatives supported it. The Senate also approved it on May 16 with a 60 to 38 vote. President Biden however, vetoed the legislation on May 31. Since taking office in 2021, Biden has issued 12 vetoes. Congress has overridden none of these. The last successful override occurred in December 2020 during Donald Trump's presidency.

 

 

“The crypto industry and its allies have long chided the SEC for not providing enough clarity for how crypto assets should be regulated. It’s just that the industry didn’t like the answer they got"- Representative Maxine Waters

 

 

SAB No 121 introduced by the SEC, requires banks to list cryptocurrencies as liabilities rather than assets. President Biden's veto suggests his administration's cautious approach toward the burgeoning digital asset industry. They aim for stringent regulations to ensure financial stability.

 

 

Critics including many in the cryptocurrency sector, have accused the Biden administration of stifling industry-friendly legislation. The administration also opposed the Financial Innovation and Technology for 21st Century (FIT21) Act. This act aimed at clarifying digital asset regulations.

 

In conclusion, the House’s inability to override Biden’s veto leaves the SEC rule intact. This rule limits US banks from acting as crypto custodians. The ongoing debate highlights the contentious nature of digital asset regulation in the US.

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