Senator Cynthia Lummis's successful effort to overturn SAB 121 marks a significant moment for the crypto industry. The decision faces opposition from President Biden, who promises to veto the resolution.
The recent Senate vote to overturn SAB 121, a mandate introduced in March 2022 requiring financial institutions to list customers’ digital assets on their balance sheets, has sparked significant debate. Critics argue that SAB 121 imposes substantial operational and financial burdens on firms handling cryptocurrencies and potentially exposes customers’ assets to risks in bankruptcy situations.
Senator Cynthia Lummis, a prominent pro-crypto advocate, led the resolution's passage. She emphasized the dangers of SAB 121, stating that placing customers’ assets on institutional balance sheets could jeopardize those assets during bankruptcies. Lummis also advocated for self-hosted wallets for digital assets, aligning with her recent challenges to the Department of Justice’s views on non-custodial crypto services.
After the vote, Lummis expressed her satisfaction on social media, highlighting the Senate’s decision as a victory for financial innovation and a rebuke of the current administration’s approach to crypto regulation. However, despite the resolution's success in Congress, it did not secure enough votes to be veto-proof, and President Joe Biden has vowed to veto the resolution, arguing it would weaken the SEC’s ability to protect investors.
Prominent crypto community figures, including Michael Saylor, celebrated the Senate’s decision. The industry continues to rally support for pro-crypto political candidates, with Coinbase launching a political action committee (PAC) named "Stand With Crypto" to back crypto-friendly candidates.
