US Senate supporting the House of Representatives in invalidating the controversial SEC crypto policy ‘Staff Accounting Bulletin No. 121’.
The Securities and Exchange Commission (SEC) is trying to regulate the cryptocurrency market and convert digital assets into investment contracts. To do so, the agency introduced Staff Accounting Bulletin No. 121 (SAB 121), which faced opposition from the US Senate and the House of Representatives.
As per yesterday’s vote, the US Senate joined hands with the House of Representatives to strike down the SEC’s crypto policy.
What Yesterday’s US Senate Vote Says?
On May 16, the US Senate passed H.J. Res 109 bill followed by a 60-38 vote in the Senate and earlier approval from the House. The bill would invalidate the SEC’s crypto policy and was passed with substantial bipartisan support.
Avicahl, co-founder of Electric Capital took to X to communicate the same.
1/ The US Senate just voted 60-38 to overturn SAB 121
— Avichal – Electric ϟ Capital (@avichal) May 16, 2024
This is a BIG deal!
It is the 1st crypto bill to get to the President
It also sends a message to @SECGov that they are screwing up
What is SAB 121?
Why is this vote a big deal?
How did the banks help crypto win here?!
pic.twitter.com/1QOsR8UcJJ
Senator Chuck Schumer, also voted in favor of invalidating SAB 121, indicating strong Congressional support for the crypto market. The Senate’s decision conveys a critical point not only for crypto regulation but also for political alignments involving financial technology.
Responding to Avichal’s post, the Chief Investment Officer at Bitwise, Matt Hougan described the step as a game-changer for the crypto industry and would act as a catalyzer for cryptocurrencies.
SEC Vs Cryptocurrency: Who Will Win?
In April 2022, the SEC introduced SAB 121 which mandated cryptocurrency custodians to list digital assets as liabilities on their balance sheet. The decision wasn’t received well by the crypto community as the community believed that this regulation unfairly treats customer-owned digital assets as the custodian’s liabilities.
Staff Accounting Bulleting No. 121 I Source: SEC
In continuation to this, the agency also charged major cryptocurrency exchanges including Coinbase, Uniswap, Kraken, etc. According to the SEC, all these exchanges are operating their digital assets trading platform as an unregistered national securities exchange.
On May 4, Robinhood, a popular crypto trading service provider received a Wells Notice from the SEC. The agency warned Robinhood’s cryptocurrency subsidiary of pending legal action.
SEC’s Move On Spot ETFs
The SEC’s delay in its decision on the spot Ethereum ETF also disappointed the crypto community. In May, the regulator extended the period of approving or disapproving the spot Ethereum ETF for an additional 60 days.
The next date for the final decision is scheduled for July 5. Moreover, approval of the spot Bitcoin ETF was a favorable act by the SEC.
At press time, Bitcoin was trading at $66,374.47, after a surge of 0.25% in a day with a market cap of $1,306,710,708,564. Ethereum, alternatively, stands at $3,028.59, after an intraday spike of 1.04% with a market cap of $363,658,791,096.
