US House Overturns SEC’s Crypto Accounting Rule: A Major Shift for Bitcoin (BTC) and Other Cryptocurrencies

• The US House of Representatives has voted to overturn an SEC rule affecting cryptocurrency custodians, with the resolution gaining bipartisan support.
• The resolution, which received 228 votes in favor, is now headed to the Senate, with a potential veto from the White House looming.
• Critics of the SEC rule argue that it makes it difficult for banks to safely handle digital assets.

The US House of Representatives has passed a resolution to overturn a Securities and Exchange Commission (SEC) rule affecting cryptocurrency custodians, sparking debate on the role of banks in the digital asset industry.

US House Votes to Overturn SEC Crypto Rule

The US House of Representatives has passed a resolution aiming to overturn a Securities and Exchange Commission (SEC) bulletin on accounting standards for cryptocurrency custodians. The measure, passed by a vote of 228-182, saw significant support from Republicans and backing from 21 Democrats. This move reflects growing tensions between legislative preferences and regulatory measures concerning the digital asset industry.

Debate Over SEC Rule on Crypto Custody

The controversial SEC bulletin, originally issued in 2022, mandates that firms holding cryptocurrencies on behalf of customers must include these holdings as liabilities on their balance sheets. This requirement has sparked debate, with opponents arguing that it makes it excessively burdensome for financial institutions to safeguard digital assets. The House debate showcased a rare bipartisan approach to an issue that typically polarizes opinion along party lines.

White House Opposition and Future Implications

The measure’s future is uncertain as it moves to the Senate, where it must pass through the Senate Banking Committee before a full Senate vote. The White House has already expressed opposition, with a statement indicating that President Joe Biden would veto the resolution. The administration argues that curbing the SEC’s regulatory power would introduce significant financial instability and market uncertainty, an undesirable outcome amid the volatile nature of crypto markets.

Conclusion

The potential reversal of the SEC bulletin has broader implications for the regulation of digital assets. Industry stakeholders are concerned about the role of traditional banks in the cryptocurrency space and the extent of regulatory oversight deemed appropriate. The resolution’s proponents argue that the SEC’s requirements are too stringent and stifle innovation and participation in the digital economy.