House Vote on SEC SAB 121 Postponed

The House vote to override President Biden's veto on the SEC's Staff Accounting Bulletin No. 121 (SAB 121) has been postponed. Initially set for Wednesday, July 10, the vote will now occur on Thursday, July 11, at approximately 10:30 AM.

The delay occurred after President Biden allegedly sent a letter to the House, prompting the vote postponement. The content of the letter still needs to be discovered.

Representative Patrick McHenry, who has publicly spoken against the SEC's rule, expressed concern and annoyance at the delay. McHenry claimed that the rule is anti-crypto since it forces companies storing cryptocurrencies for clients to book these assets as liabilities on their balance sheets. He said, 'We should not be doing business this way.'

Background on SAB 121

Released in 2022, the SEC's SAB 121 is a set of strict accounting standards for companies that deal with cryptocurrencies. **Opponents of the rule, including some of the most active members of the cryptocurrency community, state that the rule hampers business development and adds excessive regulation to the market.

The rule requires firms to recognize crypto assets as liabilities, which is perceived to hinder the expansion of crypto custodian services to other traditional financial institutions.

The House and Senate approved a motion to repeal SAB 121 with bipartisan support. However, President Biden vetoed the resolution, hence the current push to counter his veto.

This delay has a ripple effect on the ongoing discourse on cryptocurrency regulation in the United States. **President Biden's letter influenced some lawmakers, raising concerns about whether they would have enough votes to counter the veto.

A two-thirds vote is needed to override a presidential veto in the House of Representatives, which is quite tricky considering the current political situation.

Some sources indicate that many Democrats who pushed the repeal may now support Biden, especially with the impending elections.

Political and Market Reactions

The postponement of the vote has caused different reactions from the stakeholders. A recent poll found that Republican voters have a positive perception of cryptocurrency and prefer laws clearly defined by their elected officials instead of regulatory agencies.

In the meantime, the Biden administration's position regarding the retention of SAB 121 clearly indicates that the cryptocurrency market will remain closely monitored. This position might hamper market sentiment and investors' confidence in the crypto space.

The House will reconvene on Thursday to address this critical issue, with all eyes on whether the veto can be successfully overridden or President Biden's position will prevail.