Sen. Cynthia Lummis and Rep. Patrick McHenry press President Biden not to veto SAB 121

Lawmakers pressed President Joe Biden not to veto a legislative measure overturning a controversial Securities and Exchange Commission bulletin that establishes accounting standards for firms that custody crypto.

In a letter sent on Thursday to President Biden, Republicans Sen. Cynthia Lummis, R-Wyo., and House Financial Services Committee Chair Patrick McHenry, R-N.C., among other lawmakers, cited bipartisan votes in the House and Senate as a reason not to veto.

Earlier this month, the full House and Senate voted in favor of the measure to repeal the SEC's staff accounting bulletin, also called SAB 121. The bulletin has drawn controversy over the past year over concerns in the crypto industry that it could prevent banks from safeguarding digital assets. It requires firms that custody crypto to record customer crypto holdings as liabilities on their balance sheets.

“Given the overwhelming bipartisan votes, we urge you to sign H.J. Res. 109 into law or work with the SEC to rescind the staff guidance,” the lawmakers said in a statement. “Rescinding SAB 121 is well within the SEC’s authority and there is ample precedent for revisiting a staff accounting bulletin."

Reps. French Hill, R-Ark., Andy Barr, R-Ky., Tom Emmer, R-Minn., Mike Flood, R-Neb., Ritchie Torres, D-N.Y., Wiley Nickel, D-N.C., and Dan Meuser, R-Pa., also signed the letter.

The House previously voted 228-182 to pass the measure, with mostly Republicans, though 21 Democrats did sign on. A week later, the Senate voted 60 to 38, with several Democrats, including Senate Majority Senate Majority Leader Chuck Schumer, D-N.Y., voting in favor of the measure.

Veto threat

In a "statement of administration policy" released by the White House, President Biden said he would veto the measure. Specifically, the White House said that "limiting the SEC’s ability to maintain a comprehensive and effective financial regulatory framework for crypto-assets would introduce substantial financial instability and market uncertainty."

Overturning a veto requires a two-thirds majority. Vote counts in the House and Senate for H.J. Res. 109 are below that threshold.

Biden has vetoed measures before that passed the Senate and House with bipartisan votes. For example, the president vetoed a measure earlier this month to overturn a joint employer rule that had passed the Senate and House by bipartisan margins, according to Bloomberg Law