House Fails to Overturn Joint Resolution Nullifying SEC Accounting Rule
Commentary by Steven Lofchie
In a 228-184 vote, the House of Representatives failed to overturn President Biden's veto of a joint congressional resolution of disapproval on SEC Staff Accounting Bulletin No. 121 ("SAB 121").
SAB 121 provided accounting and disclosure guidance for entities related to their obligations to safeguard crypto assets held for users of its platform. (See related coverage.)
207 Republicans voted in favor of overriding the veto, 1 opposed and 12 did not vote. 21 Democrats voted in favor of overriding the veto, 183 opposed and 9 did not vote.
Commentary
Whatever one thinks of the wisdom of investing in digital assets, there is substantial evidence that retail investors are put at risk by the SEC adopting guidance that effectively discourages banks from providing custodial services for those assets. The result is that investors often use unregulated entities as custodians, which does not serve them well. The SEC should consider whether SAB No. 121 does more harm than good.
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