Overview of SAB 121 and Its Implications for Cryptocurrency Custody

Overview of SAB 121- Impact of 2024 Election Campaigns on Digital Asset Industry

Overview of SAB 121– President Joe Biden’s decision to veto Staff Accounting Bulletin 121 (SAB 121) has stirred controversy and could see a vote in the House of Representatives next week.

SAB 121 is a proposed rule requiring SEC-reporting entities that hold cryptocurrencies to list those holdings on their balance sheets. This rule is currently included in the House’s legislation that may be considered list, as noted by House Majority Leader Steve Scalise.

According to the Constitution, the House must vote again to overturn or uphold the President’s veto. This vote is expected to take place either on Tuesday or Wednesday.

Earlier this year, a resolution to overturn SAB 121 received bipartisan support, passing the House with a 228-182 vote and the Senate with a 60-38 vote. Despite this, President Biden vetoed the resolution in May.

Critics of SAB 121 argue that it would limit American banks’ ability to manage cryptocurrency exchange-traded products on a large scale. They fear this could create a concentration risk by shifting more control to non-bank entities.

Overturning the President’s veto will require a two-thirds majority vote in both the House and the Senate. In the initial vote, only 55.6% of House members and 61.2% of Senate members supported the resolution. This means gaining additional support, especially from Democrats, is crucial this time around.

Uphill Battle for Overturning the Veto

Steep hill to climb but not impossible given how bipartisan the FIT vote was, explained Alexander Grieve, who handles government affairs at cryptocurrency investment firm Paradigm.

The Financial Innovation and Technology for the 21st Century Act (FIT), designed to clarify the roles of U.S. commodities and securities regulators in cryptocurrency matters, was passed by the House in May with a 279-136 vote.

Campaign Focus on Digital Assets

As the 2024 U.S. election approaches, both President Biden and Republican candidate Donald Trump are ramping up their campaign efforts. Notably, both candidates have increased their focus on issues related to digital assets.

Kerri Langlais, chief security officer at Bitcoin miner TeraWulf, recently told Cointelegraph that this heightened attention to digital assets is a good development for the industry.

Albeit to different degrees, both Biden and Trump’s original positions on crypto have shifted favorably our way in the last year. We should continue to build on that progress with our education and political efforts.

Kerri Langlais

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