Senate Passes Crypto Custody Bill, But Biden’s Veto Threatens – What Will Happen in 10 Days?
The Senate approved the H.J. Res 109 Bill today, a resolution seeking to reverse the SEC’s Staff Accounting Bulletin (SAB) No. 121. Despite bipartisan support, President Biden has the authority to veto the Bill. The White House has already expressed its opposition, citing concerns about investor protection and the stability of the financial system.
The resolution aims to remove restrictions imposed by SAB 121, allowing regulated financial institutions to offer cryptocurrency custody services. However, Senator Elizabeth Warren and other critics argue that digital assets present unique risks that require special regulations. Incidents like the Binance and FTX fraud cases serve as examples of the potential hacking risks associated with cryptocurrencies.
On the other hand, supporters of the resolution believe that overturning SAB 121 is crucial for consumer protection. They contend that the current custody practices lead to centralization risks, with a few institutions holding the majority of Bitcoins. By allowing more regulated institutions to handle digital asset custody, they argue that compliance frameworks and security protocols will provide adequate safeguards.
President Biden now has 10 days to veto, sign, or take no action on the bill. If he does nothing, the bill will become law without his signature. However, given his stated intention to veto the bill and the opposition from Senator Warren and the SEC’s Gary Gensler, it is likely that Biden will follow through with a veto.
If the veto occurs, the resolution will be halted, and the current restrictions on financial institutions’ custody of digital assets will remain in place. However, there is a possibility of a “pocket veto” if Congress adjourns during the 10-day period, further complicating the outcome. The crypto custody bill’s fate hangs in the balance, and the next 10 days will determine its future.