The U.S. Home of Representatives voted to amble a measure that would possibly well possibly overturn the U.S. Securities and Trade Price’s (SEC) controversial Workers Accounting Bulletin (SAB) 121, which would require crypto custodians to withhold customer’s crypto belongings as liabilities on their very own balance sheets.

The vote ended 228-182, with nearly all of votes solid by Republicans, in favor of the measure to overturn the bulletin. The resolution used to be attach of dwelling in circulation by Sen. Cynthia Lummis (R-Wyo.), Bring collectively. Mike Flood (R-Neb.), and Wiley Nickel (D-N.C.) in February.

By disincentivizing properly-regulated monetary institutions from offering custody products and companies for digital belongings, the @SECGov's SAB 121 concentrates this possibility in less regulated corporations.

Republicans' CRA blocks SAB 121—making improvements to user protections in digital asset markets. pic.twitter.com/2M5FH4bDC2

— Monetary Services and products GOP (@FinancialCmte) Would possibly possibly well merely 8, 2024

The Home Monetary Services and products Committee Chair Patrick McHenry known as SAB 121 “one of possibly the most evident examples of the regulatory overreach that has defined Gary Gensler’s tenure on the SEC.”

SAB 121 used to be launched in April 2022 and stipulated that any agency having a imagine to custody crypto on behalf of purchasers would most productive uncover a device to invent so within the occasion that they held possibilities’ crypto belongings on their very own balance sheet as a liability and withhold enough capital to announce the imprint of these belongings.

McHenry important that beneath these terms, banks would be required to intention shut on important capital and liquidity fees, making it prohibitive for them to custody their purchasers’ digital belongings.

It attach of dwelling a annoying precedent and just just isn’t the correct automobile to promulgate accounting steering for digital asset custodians. I love the immense toughen of my colleagues within the Home for H.J. Res. 109 and lumber the Senate to intention shut action to advise a paunchy repeal of SAB 121.

— Bring collectively. Mike Flood (@USRepMikeFlood) Would possibly possibly well merely 8, 2024

Notably, among these opposing the measure used to be the committee’s leading Democrat, Maxine Waters, who argued that the bill “takes a sledgehammer to fix a downside that would possibly well also merely nearly want a scalpel.”

A commentary from the White Home emphasized that the President would veto the bill, noting that the administration strongly opposes the proposed resolution.

“By virtue of invoking the Congressional Overview Act, it would possibly well possibly moreover inappropriately constrain the SEC’s ability to be definite acceptable guardrails and take care of future problems connected to crypto-belongings including monetary stability,” stated the commentary from the White Home.