US House to Vote on Controversial SAB 121 After Presidential Veto

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The US House of Representatives is preparing for a critical vote next week on the controversial Securities and Exchange Commission (SEC) accounting bulletin, Staff Accounting Bulletin 121 (SAB 121), in response to a veto from President Joe Biden.

SAB 121 requires that firms that hold crypto assets in custody must document customer crypto holdings as liabilities on their balance sheets. This requirement has been met with resistance from a variety of stakeholders in the crypto space, who contend that it places superfluous burdens on financial institutions that are involved in the custody of crypto assets.

Vote on US Bill

The resolution to repeal SAB 121 will be introduced to the House floor for discussion on Tuesday or Wednesday of the upcoming week, according to House Majority Leader Steve Scalise. The House is under a constitutional obligation to review the bulletin in the wake of the presidential veto, as the forthcoming vote is imminent.

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The measure to repeal SAB 121 was approved by the full House in May, with a significant number of Republicans and 21 Democrats supporting the resolution. The vote was 228-182. The Senate passed the measure with a 60-38 vote shortly thereafter, with the support of several Democrats, including Senate Majority Leader Chuck Schumer, D-N.Y.

Nevertheless, a two-thirds majority in both chambers of Congress is necessary to override a presidential veto. The resolution’s advocates face a substantial obstacle in the form of this substantial threshold.

Viewpoints on the Election

Alexander Grieve, the director of government affairs at Paradigm, a venture capital firm, maintains a cautious optimism regarding the likelihood of overturning the prohibition. Grieve emphasized the bipartisan nature of previous votes regarding crypto market structures in a post on X, including the FIT21 law, which attracted significant support from both political parties. He proposed that a comparable bipartisan initiative could garner sufficient support to overturn the veto of SAB 121.

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“Do you recall when Biden vetoed the SAB121 rollback?” Grieve commented, “It will be back on the House floor next week. Let’s see if the House can rally a ⅔ vote to overturn the veto, which is a steep hill to climb but not impossible given how bipartisan the FIT vote was.”

Two-Thirds Majority Not Likely

Others are less optimistic about the probability of obtaining the requisite two-thirds majority, despite this optimism. Cody Carbone, the Vice President of Policy for the US Chamber of Digital Commerce, expressed doubt regarding the resolution’s likelihood of being passed. He emphasized the substantial number of votes necessary to override the veto, noting that the House would need an additional 60 votes in addition to the 228 that were initially garnered.

“I think it’s unlikely to pass given the uphill battle in terms of numbers needed to override the veto,” Carbone asserted. “It will be exceedingly challenging to persuade sixty members to alter their opinions within the next week.” I believe that it will ultimately fail, despite the fact that it is optimistic in the name of consumer protection and good governance.

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