Overview

Republican Senator Cynthia Lummis has penned a letter to President Joe Biden, urging him not to veto Congress's repeal of the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin-121 (SAB-121). The contentious nature of SAB-121 and the crypto industry’s interest in Biden's decision as the June 3 deadline approaches are key points highlighted in the communication.

Conflict Surrounding SAB-121

Senator Lummis, recognized for her support of cryptocurrencies, criticized the SEC's issuance of SAB-121 and its lack of transparency in disclosing the guidance. She raised concerns about the SEC's avoidance of standard rulemaking procedures, which excluded key stakeholders from participating in the policy-making process.

In her letter, Lummis emphasized, “The SEC's directive bypassed essential procedures, hindering critical feedback from stakeholders like banking regulators, and evaded requirements specified in the Administrative Procedure Act.”

Congressional Response

Lummis concluded her letter by referencing SEC Chair Gary Gensler’s stance on retaining the rule and the bipartisan message sent by Congress through the repeal of SAB-121. The SEC’s controversial Bulletin, originally set for implementation on April 11, 2024, encountered strong resistance from the crypto community and lawmakers.

The House of Representatives and the Senate unified in favor of repealing the SEC’s guidance, with Congress decisively voting to overturn SAB-121 by substantial margins.

Potential Biden Decision

Although President Biden had hinted at vetoing the repeal, recent developments suggest a shift in policy regarding cryptocurrencies within the White House. Engagements with blockchain companies for future crypto regulations and the influence of past pro-crypto sentiments from former President Trump may sway Biden's decision.

The impending June 3 deadline heightens anticipation within the crypto industry for Biden’s verdict on the contentious repeal of SAB-121.