- House delays vote on SEC’s SAB 121 to Thursday, amid concerns.
- Bipartisan support for repealing SAB 121 faces hurdles from Biden’s veto.
- SEC’s SAB 121 labels crypto assets as liabilities, impacting the market.
The House of Representatives has called a meeting on the subject of the SEC’s Staff Accounting Bulletin Number 121 (SAB 121) in an effort to demonstrate its support for President Biden. Voting was supposed to take place on Wednesday, July 10, but it will now take place at roughly 10:30 a.m. on Thursday, July 11.
Representative McHenry Voices Concerns
Representative Patrick McHenry expressed his concern and annoyance at the delay. He stated that the rule is anti-crypto because it forces companies storing cryptocurrencies for clients to book these assets as liabilities on their balance sheets. “We should not be doing business this way,” McHenry said.
Secured to be released in 2022, SAB 121 by the SEC is a set of very specific and rigorously constrained accounting rules for firms involved with cryptocurrencies. Critics and several of the participants engaged in the cryptocurrency market say that the letter prevents the development of businesses.
The rule categorises these crypto assets as stock and this leads to firms to record them as a deficit, a condition that is credited for slowing down development of crypto custodian services in conventional financial institutions.
Bipartisan Efforts to Repeal SAB 121
The House and Senate had earlier approved a motion to repeal SAB 121 with bipartisan support. However, President Biden voted for the resolution, leading to the current push to counter his vote. This delay has a ripple effect on the ongoing discourse on cryptocurrency regulation in the United States.
President Biden’s letter influenced some lawmakers, raising concerns about whether they will have enough votes to counter the vote. A two-thirds vote is needed to override a presidential vote in the House of Representatives, which is challenging given the current political situation.
Some sources indicate that many Democrats who initially supported the repeal may now back Biden, especially with the impending elections. The postponement of the vote has caused different reactions from stakeholders. A recent poll found that Republican voters have a positive perception of cryptocurrency and prefer laws clearly defined by elected officials instead of regulatory agencies.
Market Reactions and Future Implications
The Biden administration’s stance on retaining SAB 121 indicates that the cryptocurrency market will remain closely monitored. This position might affect market sentiment and investor confidence in the crypto space. The House will reconvene on Thursday to address this critical issue, with all eyes on whether the vote can be successfully overridden or if President Biden’s position will prevail.
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