Biden may reconsider veto of SAB 121 vote due to political support for crypto

In the year On May 16, 2024, a majority of lawmakers in the United States Senate approved the Congressional Review Act (CRA) to review Securities and Exchange Commission (SEC) Staff Bill No. 121 (SAB 121).

US Senators pass HJRes. 109 by a vote of 60 to 38, a special measure for the US Congress.

In addition to superior support for HJRes. 109, the vote was highly bipartisan, favoring Democrats 51-49. According to Sen. Cynthia Lammis, the vote represents a new chapter in the first session of Congress to pass “neutral crypto legislation.”

But before the House of Representatives could vote on the bill, President Biden threatened to use his executive powers to veto the SEC policy if there was a resolution to overturn it.

The White House said it “strongly opposes” efforts by House of Representatives members to block the SEC's efforts to “protect investors in crypto-asset markets and protect the broader financial system.”

So, after Democrats and presidential candidate Donald Trump came out as pro-crypto, will he carry out his threat now? About one-third of threatened vetoes in previous administrations were never carried out, so the threat alone does not mean that the veto agreement was carried out.

Significant support on both sides of the crypto bill

Perrian Boring, founder and CEO of the blockchain trade association Digital Chamber, highlighted how important it is for Congress to pass HJRes. 109 with such strong support.

He explained that the tedious debate over SAB 121 led 21 Democratic senators to break ranks and support the bill, ending with 12 Democratic senators voting.

She highlighted how Chuck Schumer is among the most vocal supporters of Democratic senators. “Schumer is the Senate Majority Leader and the second most powerful person in the country, second only to President Biden.”

The former congressional staffer and television anchor described how Democrats' support for the Biden administration should feel like a “watershed moment.” She said Schumer's endorsement could force the White House to “rethink its strategy and position.” In her opinion, “the tide is turning on crypto in Washington.”

It's not just the crypto community that wants Biden to sign HJRes, so the Biden administration may feel pressure beyond the political sphere. 109. The American Bankers Association expressly urged “President Biden to move quickly to sign this resolution into law to help protect American consumers.”

The banking sector has an economic incentive to provide support for cryptocurrencies, as banks want their piece of the pie in retail adoption.

The ball is in the White House court.

After HJRes. 109 With broad support, the Biden administration has a complicated decision.

Biden should evaluate whether it is appropriate to oppose HJRes. 109 as it might open up an internal conflict within their party. With the next US election so close, is SAB 121 too important for the SEC to open an internal battle within the Democrats? Biden may have to weigh the pros and cons.

Patrick Kirby, head of policy for the Crypto Council for Innovation, explained to Cointelegraph how “the president has 10 days (not including Sundays) to sign the resolution into law, allow it to become law without a signature, or veto it.”

Biden's Sleeve to “Pocket Veto” SAB 121; This can happen if Congress does not move to accept the bill as signed or rejected. Fox reporter Eleanor Terrett explains how the president will give his stamp of approval and plug the decision, which ultimately won't be turned into law in Congress because it's not in session. Terrett believes “it can be used as a strategic way to avoid a lot of political backlash.”

However, Biden may consider Donald Trump's crypto regulatory changes favorable to the crypto industry. Trump may have identified a loophole he can use to remove Biden's support and votes for the upcoming November 5, 2024 election. As the SAB 121 challenges loomed, Trump's strategy quickly shifted from anti-Bitcoin to anti-Bitcoin himself. Pro-Crito presidential candidate.

Kirby explained how if the president ultimately decides to reject HJRes. 109, Congress may try to repeal it. For it to pass, it requires “two-thirds of the votes cast in both houses of Congress.”

The SEC could solve Biden's veto problem by repealing SAB 121.

Biden's dilemma of whether or not to carry out his veto threat may have another solution that will benefit the administration greatly.

The SEC may decide to waive SAB 121 to force Biden to decide whether to exercise his veto. Republican Willie Nickell described how SEC President Gary Gensler holds the key to ending the “political football” created by the SEC's controversial crypto regulation measure.

If the SEC removes SAB 121 from its policy, Biden won't need to decide to avoid a congressional repeal.

SAB 121 has also received criticism within the regulatory agency. May 17, 2024 Commissioner Hester Pearce explains at a Blockchain Summit hosted by the Digital Chamber in Washington that she feels “bad” about the SAB 121 policy.

Pearce said the regulatory agency has received a lot of feedback since it started, saying it “really doesn't work” and “puts people off the industry.”

SAB 121 requires listed companies, including banks, to record crypto assets as both assets and liabilities on their balance sheets. Many legislators and industry leaders have criticized the SEC's measure, saying that this practice is contrary to the normal treatment of assets in custody, which often do not appear on the balance sheet because they belong to the client.

Pierce said she believes it is “positive” that Congress is weighing in on crypto regulatory issues. For policy leader Kirby, this vote is a win for consumers who want to keep their digital assets safe, a win for financial innovations and “clearly a sign that major policy changes will go through the appropriate regulatory and legislative processes.”

Biden says the SEC has the ball in their court, and the next step is up to them.