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The US Senate on Thursday passed Joint Resolution 109, which seeks to overturn the Security and Exchange Commission’s Staff Accounting Bulletin (SAB) 121. The legislation now heads to President Joe Biden’s desk, where it is expected to be vetoed.
Twelve Democratic Senators voted in favor to pass the resolution Thursday: Kirsten Gillibrand of New York, John Hickenlooper of Colorado, Gary Peters of Michigan, Jon Tester of Montana, Kyrsten Sinema of Arizona, Mark Kelly of Arizona, Jacky Rosen of Nevada, Bob Casey of Pennsylvania, Cory Booker of New Jersey, Ben Ray Luján of New Mexico, Ron Wyden of Oregon and Majority Leader Chuck Schumer of New York.
SAB 121, introduced in March 2022 and enacted the following month, states that digital asset custodians should report a liability and “corresponding assets” on their balance sheets for all custodied cryptocurrencies. The practice, SEC staff said, is intended to guard against the “significant risks and uncertainties associated with safeguarding crypto assets.”
Last week, in the Republican-controlled House, 21 Democrats voted in favor of passing the resolution. The White House said last week that should the legislation make it to President Joe Biden’s desk, he would veto it.
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“SAB 121 was issued in response to demonstrated technological, legal and regulatory risks that have caused substantial losses to consumers,” the Biden administration wrote in a statement. “By virtue of invoking the Congressional Review Act, it could also inappropriately constrain the SEC’s ability to ensure appropriate guardrails and address future issues related to crypto assets including financial stability.”
The president has ten days, excluding Sundays, to veto or sign off once it reaches his desk.
Rep. Wiley Nickel, D-N.C., who co-sponsored the resolution, on Wednesday asked SEC Chairman Gary Gensler to repeal SAB 121 ahead of the Senate vote.
Read more from our opinion section: It’s time to overturn SAB 121
“Today’s Senate vote to repeal SAB 121 sends a clear bipartisan message: Congress will not stand idly by as Gary Gensler and the SEC deliberately sidestep the statutory rulemaking process and overstep their regulatory authority,” Nickel said Thursday in a statement.
The SEC did not immediately respond to Blockworks’ request for comment.