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U.S. Senate joins House to overturn SEC’s crypto policy

By:
on May 16, 2024
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  • The U.S. Senate voted 60-38 to overturn the SEC's crypto policy, aligning with the House's effort.
  • Biden pledges to veto the resolution, arguing it undermines investor protection and financial stability.
  • A dozen Democrats joined Republicans in favor of the resolution, but it lacked enough votes to be veto-proof.

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The U.S. Senate voted 60-38 on Thursday to overturn the controversial Securities and Exchange Commission (SEC) crypto policy known as Staff Accounting Bulletin No. 121 (SAB 121).

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This move aligns with a similar effort by the House of Representatives to erase the policy.

Despite this legislative push, President Joe Biden has pledged to veto the resolution, maintaining the policy’s enforcement.

Bipartisan support and veto challenge

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The vote saw a dozen Democrats joining a majority of Republicans in favor of overturning SAB 121, comfortably surpassing the simple majority needed for passage.

However, the resolution did not achieve the necessary votes to become veto-proof, leaving it vulnerable to Biden’s promised veto.

The President has argued that removing the rule could disrupt efforts to protect investors in crypto-asset markets and safeguard the broader financial system.

Biden’s concerns over investor protection

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President Biden’s opposition to the resolution centers on concerns about investor protection and financial stability.

He emphasized that SAB 121 plays a critical role in regulating crypto-asset markets, aiming to mitigate risks and ensure the safety of the financial system.

The President believes that erasing the policy through this legislative effort would undermine these protections.

Implications for the crypto industry

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The Senate’s vote represents a significant stance against the SEC’s policy, reflecting ongoing tensions between regulatory efforts and the evolving crypto industry.

While the Senate and House have shown substantial support for overturning SAB 121, the crypto industry may still face challenges due to the existing banking constraints and regulatory landscape.

Biden’s veto promise underscores the administration’s commitment to maintaining stringent oversight in the crypto sector.

Future of crypto regulation

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As the resolution faces a likely veto from President Biden, the future of SAB 121 remains uncertain.

The ongoing debate highlights the complex dynamics between regulatory bodies, lawmakers, and the crypto industry.

The outcome will have important implications for how crypto assets are regulated and the extent of government involvement in shaping the industry’s future.

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