2024

Rule

Biden

Bitcoin

<h2 id="key-points">Key Points</h2>
<ul>
 <li>US Senate passed the H.J.Res. 109 that would overturn SEC’s rule preventing regulated firms from custodying Bitcoin and crypto.</li>
 <li>The legislation passed with a vote of 60 to 38.</li>
</ul>
The crypto industry has just marked an important win. Yesterday, May 16, the Senate passed legislation H.J.Res. 109 that would overturn the SEC’s Staff Accounting Bulletin (SAB) no. 121 that was set to prevent highly regulated financial firms from holding Bitcoin and crypto in custody.
The legislation passed with a vote of 60 to 38, and the achievement demonstrated bipartisan support for the measure.
The resolution passed the House last week and aims to dismantle<a href="https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=409247#:~:text=%E2%80%9CSAB%20121%20requires%20financial%20institutions,the%20existing%20prudential%20regulatory%20framework." rel="noopener noreferrer nofollow" target="_blank"> SAB 121</a>. The bulletin imposes harsh restrictions on financial institutions, and it effectively bars them from acting as custodians for Bitcoin and crypto.
Under the Congressional Review act, <a href="https://x.com/USRepMikeFlood/status/1753149720518635962" rel="noopener noreferrer nofollow" target="_blank">H.J.Res. 109</a> seeks to remove the roadblocks, and it enabled highly regulated financial firms to offer custody services for Bitcoin and other digital assets.
The White House made its stance clear regarding the legislation, and a recent statement emphasizes that if the bill reached President Joe Biden’s desk, he would veto it.
The administration argued that overturning SAB 121 would disrupt the SEC’s work to protect investors in crypto and to safeguard the broader financial system.
<h2 id="overturning-sab-121-is-crucial-for-easing-centralization-concerns">Overturning SAB 121 is crucial for easing centralization concerns</h2>
The supporters of H.J.Res. 109 argued that overturning the SEC’s rule is crucial for protecting US consumers. Much of this stems from the batch of spot Bitcoin ETFs that have been approved in the country at the beginning of this year.
Most of these Bitcoins are held on behalf of a few institutions which triggers a high centralization risk. H.J.Res. 109 aims to remove barriers to allow more highly regulated institutions to take custody and hold BTC on behalf of customers, a move that would ease centralization concerns.
The critics of SEC’s rule say that this is overly restrictive and hampers the ability of financial institutions to meet the growing demand for Bitcoin and crypto services.
Regulated institutions are well-equipped to handle risks associated with crypto custody.
<h2 id="the-current-us-administration-is-trying-to-kill-crypto">The current US administration is trying “to kill crypto”</h2>
Recently, <a href="https://crypto.ro/en/predictions/cardano-ada-price-prediction/" rel="noopener noreferrer nofollow">Cardano</a>‘s founder Charles Hoskinson,<a href="https://crypto.ro/en/news/cardano-founder-president-joe-biden-is-trying-to-kill-crypto-and-destroy-the-industry/" rel="noopener noreferrer nofollow"> lashed out</a> at the US President Joe Biden, saying that he’s making efforts to destroy the crypto industry in the country. He explicitly said that Biden is trying to “kill crypto.”
He cited the restricted access to bank accounts, the SEC’s policy of regulation by enforcement, and the White House “obstructing” the legislative process.
Hoskinson’s comments came in following the Biden administration’s efforts to discourage banks from holding crypto in custody.
On May 9, the “Bitcoin Senator”&nbsp;<a href="https://twitter.com/CynthiaMLummis/status/1788603505998975425" target="_blank" rel="noopener noreferrer nofollow">Cynthia Lummis</a>&nbsp;shared a post on her X account, highlighting that she has garnered support from 30 GOP senators in the Senate to overturn the SEC’s SAB 121, which imposes limitations on financial institutions holding Bitcoin.
<blockquote class="twitter-tweet">
 Let’s do this. <a href="https://t.co/t1O8Z8sUKi" rel="noopener noreferrer nofollow" target="_blank">https://t.co/t1O8Z8sUKi</a>
 — Cynthia Lummis <img src="https://s.w.org/images/core/emoji/14.0.0/72x72/1f9ac.png" alt="🦬" class="wp-smiley" style="height: 1em; max-height: 1em;"> (@CynthiaMLummis) <a href="https://twitter.com/CynthiaMLummis/status/1788668554004320262?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow" target="_blank">May 9, 2024</a>
</blockquote>
After yesterday’s vote, Senator Lummis shared <a href="https://x.com/SenLummis/status/1791181277044875366" rel="noopener noreferrer nofollow" target="_blank">a post</a> with laser eyes on X, celebrating the results.
The future of this resolution remains uncertain due to the potential veto coming from the US President.
Biden reportedly has the options to sign the bill into law, veto it, or do nothing. If he chooses to do nothing, the bill goes into law without his signature.

US Senate Passes Legislation Overturning SEC’s Rule On Bitcoin Custody

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