Benzinga - Crypto industry experts are calling for bipartisan support in the regulation of digital assets, emphasizing the need to work across party lines to establish sound crypto policies, as the U.S. Senate voted 60-38 on Thursday to overturn the contentious Securities and Exchange Commission (SEC) policy known as Staff Accounting Bulletin No. 121 (SAB 121).
What Happened: This action follows a similar vote by the House of Representatives, marking a bipartisan effort to challenge the SEC’s approach to crypto asset regulation.
However, President Joe Biden has pledged to veto the resolution, complicating the potential repeal of the policy.
Legislative Push And Presidential Veto Threat SAB 121, issued in 2022, mandates that companies holding customers’ cryptocurrencies must record them on their balance sheets, a requirement that could have severe capital implications for banks dealing with crypto clients.
Critics argue that this policy was implemented without the necessary rulemaking process, a stance supported by the Government Accountability Office.
President Biden expressed concerns that overturning SAB 121 would undermine efforts to protect crypto-asset investors and safeguard the broader financial system.
He stated that allowing the rule to be removed in this manner would disrupt critical regulatory work.
“A dozen Democrats joined the majority of Republicans in supporting the resolution, which easily surpassed the simple majority needed to pass,” the Senate announced.
Despite this, the resolution did not achieve the supermajority required to override a presidential veto.
Bipartisan Support And Opposition The Senate vote saw a dozen Democrats join the majority of Republicans, surpassing the simple majority needed to pass but not enough to override a veto. Sen. Cynthia Lummis (R-Wyo.), a prominent critic of SAB 121, called the bulletin “a disaster” and a failure to protect consumers.
“This is a win for financial innovation and a clear rebuke of the way the Biden administration and Chair Gary Gensler have treated crypto assets,” Lummis stated.
Jake Chervinsky, Chief Legal Officer at Variant Fund, highlighted the bipartisan nature of the issue, stating, "The best path to good crypto policy is to embrace both parties, not to pick one over the other."
This sentiment was echoed by Ryan Sean Adams, who noted the diminishing support for anti-crypto measures within key Democratic circles, and by the Blockchain Association, which stressed the growing public awareness and support for cryptocurrency among voters.
Adams, a crypto investor and entrepreneur, highlighted the shift in Democratic support saying, “The Warren & Gensler Anti-Crypto Army is losing the support of key Democrats. The American people want an open internet and the option to use crypto. Crypto shouldn’t be partisan. Pro-crypto is pro-American values.”
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Industry Reactions The Blockchain Association noted the Senate's overwhelming bipartisan vote to repeal SAB 121, signaling strong disapproval of the rule across political divides.
They emphasized the importance of not punishing consumers for embracing new technologies and called on the administration to align with Congress and sign the repeal.
Ryan Selkis, Founder and CEO of Messari Crypto, expressed his intent to oppose the White House and Senate Democrats not aligned with pro-crypto policies.
"I will be going full tilt vs the White House and Senate Dems not named @SenGillibrand until after the election. This week proved the value of that strategy for the whole group. I'll back off anyone who renounces Gensler and Warren," Selkis tweeted.
Looking Ahead Rep. Kyle Flood (R-Neb.), one of the resolution’s architects, stressed the bipartisan opposition to SAB 121 and urged President Biden to reconsider his veto.
“The President should sign my resolution to ensure the SEC reverses course and sets America on a path to growing our digital financial future,” Flood said.
As Congress continues to address crypto-related issues, the implications of these regulatory developments will be a focal point at Benzinga’s Future of Digital Assets event on Nov. 19.
Industry leaders will discuss the future of digital financial innovation and the evolving regulatory landscape.
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