The July 11 vote of 228-184 fell short of the two-thirds needed to override the president’s veto, with 21 Democrats voting to override the veto alongside 207 Republicans.
SAB 121 requires any custodian of digital assets to report those assets on their balance sheets, thereby raising capital requirements. The SEC said that requirement is needed to “enhance the information received by investors and other users of financial statements” about the risks of digital assets, according to the bulletin.
Rep. Maxine Waters, the California congresswoman who serves as the top Democrat on the House Financial Services Committee, said on the House floor July 10 that SAB 121 is “about giving the public disclosures to increase transparency about these crypto assets.”
“This kind of transparency helps prevent the kind of fraud and mishandling of crypto that led to the collapse of companies like FTX and a dozen other crypto firms that were handling and safeguarding customers’ assets,” Waters added.
However, Republicans who backed the resolution said that SAB 121 will hinder banks from custodying digital assets.
“Banks hold other assets in custody, and they don't put them on their balance sheet,” said Rep. Mike Flood, R-Neb., who sponsored H.J. Res. 109, on the House floor July 10. “This is an example of (SEC Chair Gary) Gensler at the SEC using a staff accounting bulletin to keep banks out of digital asset custody.”
Rep. Patrick McHenry, R-N.C., who chairs the House Financial Services Committee, also expressed his support for overriding Biden’s veto, as he said July 10 that “a bipartisan CRA sends a strong message. A bipartisan Congressional Review Act vote that passes both chambers: Well, that's a mandate from the Americans we represent.”
At one point, McHenry tried to appeal to Democrats by suggesting voting to override the veto may help them in upcoming elections.
“If … you want to send the message to your voters that you're pro-crypto and you want to protect their assets … (you) should vote with us,” he said.
