As a seasoned crypto investor with a deep understanding of the regulatory landscape, I strongly support the Biden administration’s decision to veto H.J.Res. 109. The SEC’s SAB 121 is a crucial measure that ensures banks treat digital assets as assets on their balance sheets and maintain adequate capital against them. This rule was put in place to mitigate the risks associated with cryptocurrencies and prevent financial instability and market uncertainty.
The White House announced through a statement that President Joe Biden’s administration intends to reject, or veto, a congressional resolution regarding crypto regulations at the Securities and Exchange Commission (SEC), should it reach his desk for approval.
In a May 8 announcement, I acknowledge that the White House strongly opposes the intention of House representatives to pass H.J.Res. 109. This proposed resolution, introduced in February, aims to reverse SEC’s Staff Accounting Bulletin (SAB) No. 121. If enacted, this bulletin would require banks to include digital assets on their balance sheets with proportional capital reserves. The White House argues that such a move could hinder the SEC’s efforts to ensure investor protection in crypto markets and maintain financial system stability.
The Biden administration explained that SAB 121 was issued in reaction to significant risks, both technical, legal, and regulatory, which have led to considerable consumer losses. However, using the Congressional Review Act to overturn this rule might unnecessarily restrict the SEC’s power to establish necessary safeguards and manage future crypto-asset issues. This limitation could result in substantial financial instability and market uncertainty within the crypto-asset sector.
On May 8, Democratic and Republican heads of the House Financial Services Committee shared their perspectives on a resolution in the House chamber. Among them was Representative Patrick Henry from the GOP side, who advocated for the passage of H.J.Res. 129. He argued that the Securities and Exchange Commission (SEC) would be granted excessive control over digital asset protections under SAB 121.
As a financial analyst, I would advocate for Americans’ ability to interact with digital assets in a secure manner. Given that banks are subjected to rigorous regulations within our nation, they present a viable solution for ensuring safety and security in this context.
Ranking Democrat member of the House committee, Maxine Waters, voiced her opposition to the joint resolution. She argued that the SEC accounting rule at hand promotes more transparency in the digital asset sector. In previous SEC guidance, she emphasized the rule’s purpose: addressing the “unique risks and uncertainties” specific to cryptocurrencies. She labeled McHenry’s actions as detrimental and partisan.
“Representative Watters explained that this level of transparency is crucial in preventing instances of crypto asset fraud and mismanagement, similar to what occurred with notable crypto firms such as FTX.”
After deliberation in the chamber where H.J.Res. 109 was approved through a voice vote, Representative McHenry requested a formal tally of the votes. However, the chairperson of the House decided to delay further action on the resolution “until a later undetermined date.” According to the U.S. Constitution, if President Biden vetoes this resolution, the House can override his decision with a vote from two-thirds of its members.
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2024-05-08 23:34