House BLOCKS SEC’s Anti-Crypto SAB 121 Provisions
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May 9, 2024 11:44 pm
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The U.S. House of Representatives voted to block an aggressive overreach of the Securities and Exchange Commission (SEC) on Wednesday.
Lawmakers voted to overturn the highly controversial measures outlined in SAB 121 preventing banks from owning crypto or otherwise holding assets on behalf of their customers. However, Joe Biden has already threatened to use his veto power to keep the draconian measure from being tossed.
Concerned lawmakers and industry professionals all shared their concerns on social media.
Following the vote and successful passage of the bill, Senator Cynthia Lummis stated:
“I am proud the House passed the bipartisan SAB 121 CRA led by Rep. Mike Flood and Wiley Nickel. We cannot allow the administration to regulate tools for financial freedom out of existence. Time for the Senate to swiftly overturn this misguided rule.”
I am proud the House passed the bipartisan SAB 121 CRA led by @USRepMikeFlood and @WileyNickel.
We cannot allow the administration to regulate tools for financial freedom out of existence.
Time for the Senate to swiftly overturn this misguided rule.
— Senator Cynthia Lummis (@SenLummis) May 9, 2024
The SEC’s statutory mission is to protect investors, facilitate capital formation, and maintain fair, orderly, and efficient markets.
Chairman Gensler is violating all three of these with his illegal SAB 121 rule. pic.twitter.com/Wky2K8zglR
— Tom Emmer (@GOPMajorityWhip) May 7, 2024
Coin Telegraph broke down the vote for the bill by party:
Notably, 21 members of the Democratic Party voted in favor of the bill, which, combined with the 207 votes from Republicans, saw the bill pass 228 votes to 182.
Attorney and crypto policy expert Ji Kim had this to say: “It’s unfortunate that the WH issued the below Statement of Administration Policy indicating that the President would veto H.J. Res 109, the resolution to nullify SAB 121.
SAB 121 would require custodians to record customers’ digital assets as liabilities on their balances sheets. This has the practical effect of making it extremely prohibitive for responsible custodians to hold digital assets. Among other effects, it would result in onerous capital requirements against such assets.
(Not to mention that the SEC issued SAB 121 without adhering to the proper CRA/APA process.)
It is imperative that custody rules in the US properly protect consumers and investors in a way that allows our industry to grow.
SAB 121 should have been subjected to public feedback and regulatory scrutiny before implementation. The SEC’s attempt to bypass established rulemaking processes under the guise of issuing ‘staff-level guidance’ undermines trust and due diligence expected in regulatory practices.”
It's unfortunate that the WH issued the below Statement of Administration Policy indicating that the President would veto H.J. Res 109, the resolution to nullify SAB 121.
SAB 121 would require custodians to record customers' digital assets as liabilities on their balances…
— Ji Kim (@_jikim) May 8, 2024
SAB 121 is illogical and illegal.
The SEC adopted it in violation of the CRA and APA for no reason other than to harm the crypto industry.
The White House should have walked away from this mess instead of doubling down on attacking US companies.
Not smart in an election year. https://t.co/Wwrw2g7TwT
— Jake Chervinsky (@jchervinsky) May 8, 2024
CoinDesk clarified:
SABs are not enforceable securities law, but instead guidance for both industry participants and the SEC itself when making legal interpretations – though they do not reflect consensus among the SEC’s five commissioners. They also generally do not go through a review process, which was the problem at hand.
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