House Delays Vote to Overturn SEC Crypto Accounting Rule (SAB 121)

• The House postponed the vote on overriding President Biden’s veto of H.J. Res. 109, rescheduling it for July 11th at 10:30 am.
• H.J. Res. 109 opposes the SEC’s SAB 121, which requires banks to list cryptocurrencies as liabilities, drawing criticism from the ABA.
• If the veto fails, the House plans to introduce a similar bill outside the Congressional Review Act to achieve its goal.

The U.S. House of Representatives has delayed a vote to override President Biden’s veto of a measure that would overturn an SEC accounting rule for crypto assets. The rule, known as Staff Accounting Bulletin 121 (SAB 121), requires banks and public companies to list cryptocurrencies as liabilities on their balance sheets.

The House was initially set to vote on overriding the veto this week, but Fox Business journalist Eleanor Terrett reported a postponement until 10:30 a.m. on Thursday, July 11th. This delay, reportedly due to the need for the House to debate a separate issue, followed a letter from President Biden to the House containing undisclosed information.

Earlier this year, Congress passed H.J. Res. 109 in an effort to nullify SAB 121 . The resolution garnered substantial support, particularly from key players in the U.S. financial sector, such as the American Bankers Association (ABA).

The ABA stated in a joint letter to Congress:

“SAB 121 represents a significant departure from longstanding accounting treatment for custodial assets and threatens the industry’s ability to provide its customers with safe and sound custody of digital assets. Other, nonbank digital asset platforms subject to SAB 121 are not required to meet the same capital, liquidity or other prudential standards as banks and therefore do not face the economically prohibitive implications of SAB 121.”

The House previously failed to secure enough votes from both parties to override the veto. The rescheduled vote will test bipartisan support, as it requires 60 more votes than the previous 228 to succeed. Terrett revealed that if the veto override fails, the House will pursue a similar bill to achieve its goal, bypassing the Congressional Review Act (CRA).

Discussions around digital assets have taken center stage in the lead-up to the upcoming U.S. elections in November. President Biden and Republican frontrunner Donald Trump have both weighed in on the debate, signaling a potential shift towards a more favorable regulatory outlook for the crypto industry.