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US House Fails to Overturn Biden’s Veto on SEC Bulletin 121 Despite Majority Support
- US Congress fails to overturn President Biden’s veto on SEC Staff Accounting Bulletin 121 (SAB121), which limits the ability of banks to provide digital asset custody services.
- Congress had previously voted to repeal SAB121 in May, but Biden then vetoed that decision.
The US Congress yesterday failed to overturn President Biden’s veto of the repeal of the Security and Exchange Commission’s (SEC’s) Staff Accounting Bulletin 121 (SAB121), which essentially prevents banks from offering cryptocurrency custody services to their customers.
A clear majority of the House voted to repeal SAB121, 228 to 184 with 21 abstentions, but this fell well short of the two-thirds majority needed to overturn a presidential veto.
The House previously voted to support a move to repeal SAB121 in May, which Biden then vetoed — this recent vote was to overturn Biden’s veto and finally remove SAB121.
So it seems that while US President Joe Biden may be struggling to remember the name of his Vice President, having referred to Kamala Harris as ‘Vice-President Trump’ at a NATO summit in Washington DC earlier today, his hostile stance towards crypto continues to hamper the digital assets industry’s progress in the US.
Related: Congress Passes Anti-SEC Crypto Rule Resolution, Braces for White House Veto
Vote Result Similar To Previous Repeal Attempt, With A Few Flip-Floppers
Fox business journalist Eleanor Terrett posted to X following the vote, pointing out that while the result was similar to the earlier repeal attempt in May, some legislators had changed their position.
In both votes, only 21 Democrats voted in favour of repealing but they weren’t all the same people. Three that previously voted ‘yes’ to repeal changed to ‘no’:
- Dean Phillips of Minnesota,
- Mikie Sherrill of New Jersey
- Marc Veasey of Texas.
While four other Democrats who had previously voted against repealing, this time voted in favour of it:
- Jonathan Jackson of Illinois,
- Ro Khanna of California,
- Tom Suozzi of New York
- Shri Thanedar of Michigan.
One Democrat who had previously voted to repeal didn’t vote this time around. A single Republican voted against overturning the presidential veto—Drew Ferguson from Georgia.
Law-makers And Industry Groups Respond
Following the vote the Republican Congressman who introduced the vote to the House, Mike Flood of Nebraska, commented in a statement, saying:
Today’s vote sent a message that a bipartisan majority of the House continues to support repealing SAB 121. Banks have long been America’s most trusted custodians, and regulators should work with them so they can provide the same services for digital assets that they have to other asset classes through the years. I will continue to work with my colleagues to pursue other pathways to end SAB 121 so that we can get government out of the way of growing our digital financial future.
Mike Flood, US Representative for Nebraska Meanwhile the CEO of Blockchain Association, Kristin Smith, released a statement sharing the association’s disappointment at the outcome of the vote while remaining hopeful of achieving a resolution through other means. She said, “While we are disappointed that the resolution to override the president’s veto of the bipartisan SAB121 Congressional Review Act did not achieve the required two-thirds majority for passage, the fight to stop this ill-conceived SEC rule will continue.”
Bipartisan support for pro-innovation and pro-digital asset policies is stronger than ever, and Blockchain Association will explore all available avenues, including through Congress and the courts, to address this unsustainable and damaging limitation of the digital asset market’s ability to access a wide range of safe custody options.
Kristin Smith, CEO Blockchain Association Related: Biden Vetoes Pro-Crypto Bill Just Days After Expressing Support for the Industry
The American Bankers Association also weighed in, saying failure to repeal SAB121 effectively means banks cannot offer crypto custody services:
As this effectively treats the custodied assets as those owned by a bank, SAB 121 effectively precludes banks from offering digital asset custody at scale since placing the value of client assets on their balance sheets will impact certain capital, liquidity, and other prudential requirements.
American Bankers Association statement on SAB121 
Author
Jody McDonald
Jody is a Brisbane-based freelance writer who specialises in writing about business, technology, and the future of work.
