In a significant move, the United States House of Representatives has voted to pass a bill overturning controversial Securities and Exchange Commission (SEC) guidance regarding banks' ownership of cryptocurrency.
The bipartisan bill, titled H.J. Res 109, specifically targets the SEC's Special Accounting Bulletin 121 (SAB 121), which mandated banks to include their customers' crypto assets on their balance sheets, contrary to traditional assets like securities.
Republican Party Representative Mike Flood, the bill's proponent, argued that SAB 121 unfairly burdened banks interested in offering crypto custody services, as custodial assets are typically considered off-balance sheet.
However, the bill faces a significant hurdle as U.S. President Joe Biden's administration has voiced its opposition.
Before the vote, the White House issued a statement indicating its intent to veto any joint resolution impacting crypto policy at the SEC.
President Biden's office expressed strong opposition to the resolution, asserting that it would disrupt the SEC's efforts to protect investors in crypto markets and ensure the stability of the broader financial system.
Despite the House's decision, the bill's fate remains uncertain in light of the administration's stance.
In response to President Biden's pledge to veto pro-crypto legislation, Cardano founder Charles Hoskinson delivered a scathing critique on his X livestream, accusing the administration of aiming to destroy the American cryptocurrency industry.
Laying bare his apprehensions regarding President Biden's vow to veto pro-crypto legislation, Hoskinson declared,
"Please understand the intent of this administration is to destroy the American cryptocurrency industry,"
Hoskinson criticised the current administration for perpetuating falsehoods and actively undermining the crypto sector through regulatory measures and a lack of clarity, lamenting the detrimental impact on the nation's global standing in the crypto arena.
He opposed Biden's rejection of the US House of Representatives' resolution aimed at overturning the SEC's crypto accounting guidance, accusing the administration of deliberate obstructionism and deception.
Hoskinson highlighted a series of enforcement actions by the White House, including restrictions on bank account access and deliberate ambiguity to obstruct legislative processes.
Hoskinson asserted,
"A vote for Biden is a vote against cryptocurrencies."
Hoskinson emphasised the potential loss of hundreds of thousands of jobs and the erosion of US leadership in cryptography and algorithms.
The Cardano founder's concerns extended beyond domestic repercussions, emphasising the potential ramifications on a global scale.
He warned that Biden's hostile policies could prompt a brain drain from the US and empower rivals like China and the Middle East in the crypto sphere, posing a risk of geopolitical adversaries leveraging crypto against the nation.
Echoing the sentiment of frustration within the crypto community, Uniswap founder Hayden Adams criticised the Biden administration's perceived indifference towards crypto regulation, warning of potential consequences for the upcoming 2024 election.
Adams drew parallels to past political miscalculations, likening the administration's approach to Hillary Clinton's campaign strategy in 2016.
“Hillary campaigning in red states states instead of swing states level miscalculation from Biden camp thinking crypto will be irrelevant in 2024 election and letting SEC + Warren wage total war - both in terms of voters and money”
He cautioned that overlooking the significance of crypto regulation could alienate a crucial voter base and financial supporters.
Adams observed Republicans smelling blood in the water, indicating a significant shift towards crypto within the party. This highlights a growing alignment between the Republican Party and the crypto industry.
"Republicans smell blood in the water and are turning hard towards crypto,"
He urged those within the Democratic leadership to advocate for a more favourable stance towards digital assets to avoid further polarisation and potential electoral repercussions.
As U.S. voters gear up for the upcoming November elections, President Biden's stance on digital assets has sparked intense debate.
Since his inauguration in 2021, Biden's executive orders aimed at establishing regulatory frameworks for cryptocurrencies have raised eyebrows. The nomination of Gary Gensler as SEC Chair signalled a shift towards stricter oversight, leading to a surge in enforcement actions against crypto firms catering to U.S. clientele.
This aggressive approach, however, has drawn criticism for its apparent lack of consistency, with civil cases looming over major players like Kraken, Coinbase, Ripple, and Binance.
With just months remaining until Election Day, voices from both within and outside the crypto sphere are questioning the administration's crypto policies, prompting some to issue stern warnings while others outright condemn the approach.
In response, members of Congress are actively pushing for legislation to delineate the regulatory roles of the SEC and the Commodity Futures Trading Commission (CFTC) in the crypto realm.
Amid mounting criticism of his anti-crypto stance, President Biden issued an executive order barring MineOne Cloud Computing Investment I L.P. from acquiring specific real estate near Francis E. Warren Air Force Base in Cheyenne, Wyoming, citing grave national security concerns.
The order was prompted by evidence revealing that MineOne, primarily owned by Chinese nationals through MineOne Partners Limited, sought to procure property within one mile of the strategic missile base.
MineOne had purchased Lot 1, Block 10 North Range Business Park 3rd Filing in June 2022, converting it for cryptocurrency mining, raising fears of potential surveillance and espionage.
Following a public tip, the Committee on Foreign Investment in the United States (CFIUS) identified significant national security risks, leading to the President's order.
MineOne and its affiliates are now required to divest all ownership interests in the property within 120 days, removing all related equipment and improvements within 90 days, under CFIUS supervision.
Any attempts to evade this order are strictly prohibited, with the Attorney General empowered to enforce compliance. MineOne must fully cooperate with CFIUS, providing updates on divestment and removal efforts to avoid further enforcement measures and penalties.
This move has elicited widespread praise on X, who perceive it as a significant stride towards alignment with President Biden's agenda.
One even highlighted that President Biden was the one who approved Bitcoin ETFs, implementing that he is not doing nothing for the crypto industry.
As the political tides surge towards the November elections, President Biden finds himself at a critical juncture, balancing national security imperatives with the dynamic terrain of cryptocurrency regulation.
His recent executive action against MineOne reflects a proactive stance on safeguarding strategic assets, yet his approach to crypto regulation remains divisive.
With voices from within the industry and beyond clamouring for clarity and consistency, Biden's electoral fate hinges on navigating these cryptic waters adeptly.
Will his decisive manoeuvres in national security bolster his standing, or will his stance on crypto prove a stumbling block?
In this landscape of uncertainty, the convergence of geopolitical strategy and financial innovation sets the stage for a high-stakes electoral showdown, where the repercussions of each policy choice reverberate far beyond the ballot box.
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