US House Votes to Overturn SEC Rule on Cryptocurrency Accounting

A resolution passed by the US House of Representatives aims to overturn an SEC bulletin on accounting standards for cryptocurrency custodians. The vote, which was 228-182, had support from both Republicans and 21 Democrats. This highlights the growing tensions between legislative preferences and regulatory measures in the digital asset industry.

US House Debates SEC Rule on Crypto Custody

The controversial SEC bulletin, issued in 2022, requires firms holding cryptocurrencies for customers to list them as liabilities on their balance sheets. This has sparked debate as opponents argue it burdens financial institutions in safeguarding digital assets.

The bipartisan House debate on the issue saw Chair Patrick McHenry criticize the SEC’s bulletin for imposing heavy requirements on banks. Democratic Representative Maxine Waters defended the SEC’s stance, citing transparency and fraud prevention as key considerations.

White House Opposes SEC Crypto Changes

The measure now heads to the Senate, where it faces scrutiny in the Senate Banking Committee. The White House has expressed opposition, stating that President Joe Biden would veto the resolution to prevent financial instability.

Senator Cynthia Lummis introduced a companion measure in the Senate, with the digital commerce community closely monitoring the situation. Industry stakeholders are concerned about the regulatory implications as the resolution aims to protect consumers and improve the regulatory process.

The potential reversal of the SEC bulletin has broader implications for digital asset regulation, with traditional banks’ role in the cryptocurrency space and the level of regulatory oversight being key concerns. Proponents argue that the current SEC requirements hinder innovation and digital economy participation.

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