US Senate Shakes Up Crypto Rules, Overturns SEC Decision

U.S. President Joe Biden has announced his intention to veto a joint resolution aimed at overturning an SEC rule that mandates banks to keep customers’ digital assets on their balance sheets.

A significant majority of U.S. Senate lawmakers have passed a resolution calling for the Securities and Exchange Commission (SEC) to revoke a rule impacting financial institutions dealing with cryptocurrency firms.

🚨US SENATE VOTES ‘NO’ TO GARY GENSLER’S ANTI-CRYPTO RULE🚨

“We are just getting started” – Senator Cynthia Lummis

– The United States Senate has just voted to repeal the controversial ‘SAB121’ rule introduced by Gary Gensler and the Securities and Exchange Commission (SEC).… https://t.co/0XDD1bNguq pic.twitter.com/UAHut7HnkX

— BSCN (@BSCNews) May 16, 2024

In a 60 to 38 vote on May 16, Senators approved H.J.Res. 109, a resolution nullifying the SEC’s Staff Accounting Bulletin No. 121.

This rule requires banks to keep customers’ digital assets on their balance sheets and maintain capital against them—a measure criticized by many lawmakers and industry leaders for hindering innovation.

“The tally, a stunning 60 ‘Yeas’ in the Senate vote, sends a strong signal that both houses of Congress, across the political divide, clearly disapprove of this rule,” said the crypto advocacy group Blockchain Association in a May 16 post on social media.

2/ The tally, a stunning 60 “Yeas” in the Senate vote, sends a strong signal that both houses of Congress, across the political divide, clearly disapprove of this rule.

— Blockchain Association (@BlockchainAssn) May 16, 2024

On May 8, before the resolution passed in the House of Representatives, President Joe Biden stated his intention to veto the bill to “protect investors in crypto-asset markets and to safeguard the broader financial system.”

Should the President veto the legislation, it will return to Congress and require a two-thirds majority vote to pass again.

“The threat of a presidential veto denies the fact that there is a growing awareness among the voting public, particularly young people, that crypto is something our elected officials should care about,” said the Blockchain Association.

The vote represented an unusual bipartisan effort by the U.S. Senate, which is split 51-49 in favor of Democrats. According to Senator Cynthia Lummis, this was the first time this session of Congress passed “standalone crypto legislation.”

The Senate passing a CRA overturning SAB 121 is a win for financial innovation and a clear rebuke of the way the Biden admin and Gary Gensler have persecuted crypto.

It also marks the 1st time Congress has passed standalone crypto legislation.

We are just getting started.

— Senator Cynthia Lummis (@SenLummis) May 16, 2024

The White House has not yet released a statement on the resolution’s passage.

“It is clear there is overwhelming opposition to SAB 121, and I urge [President Biden] to reconsider his previous statement of intent to veto the resolution,” said Representative Mike Flood, who sponsored the resolution.

The joint resolution could signal future legislative actions, such as the Financial Innovation and Technology for the 21st Century Act.

JUST IN: 🇺🇸 US Senate votes to overturn SEC rule preventing highly regulated financial firms from holding #Bitcoin and crypto.

— Watcher.Guru (@WatcherGuru) May 16, 2024

This bill, which clarifies the roles of the SEC and Commodity Futures Trading Commission in regulating digital assets, passed out of committee in July 2023 and is expected to be introduced in the House for a floor vote in May.

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