- Warren's anti-crypto crusade has run into Democratic opposition.
- Democrats joined with Republicans to support overturning an SEC crypto guideline.
- A crypto bill coming to the floor of the House may see more nuanced bipartisan debate.
Democratic Senator Elizabeth Warren’s campaign against crypto recently encountered opposition within her own party as both the Senate and House voted against a Securities and Exchange Commission guideline that may have discouraged banks from holding digital assets.
Senate Majority Leader Chuck Schumer and several other Democratic senators broke with Warren on Thursday in a 60-38 vote to overturn SAB121, even in the face of a threatened veto by President Joe Biden.
Warren said in an interview with Politico that she is “concerned about anyone in Congress who is not worried about the threat posed by Iran and North Korea and their use of crypto,” but declined to address what seem to be emerging differences on digital assets within the Democratic Party.
This comes at a time when the November elections are drawing closer and former President Donald Trump has jumped aboard the crypto bandwagon, evolving from calling Bitcoin a scam to minting his own NFTs, as DL News has reported.
Not to mention that crypto super PACs have raised millions to invest in the campaigns of crypto-friendly candidates in congressional races.
SAB121 was published by the SEC in 2022, and advises any entity, including banks, safeguarding crypto assets on behalf of others to put them on its balance sheet as if it owned them, DL News reported.
Custodians must then hold capital reserves to offset risky on-balance sheet items so they can fund their positions in the event of a default. This is expensive, and though it is just an SEC guideline, many big banks have been deterred from entering the business.
A recent article in Forbes noted the shifting political tides among Democrats in supporting the SAB121 rollback: “Lawmakers were likely drawn to this issue by a combination of recently having improved their understanding of the technology and economic implications of Bitcoin, as well as recognition that the SEC has been operating beyond its mandate.”
It added that the stage may be set for a more nuanced bipartisan debate on crypto moving forward.
Cory Booker, who was one of 11 Senate Democrats who supported the SEC rollback, told Politico: “I wanted to send a message. … I’m frustrated because we haven’t had a chance to debate any of the real crypto bills.”
That opportunity may come next week, at least in the House, as Republicans have scheduled a vote on the Financial Innovation and Technology for the 21st Century (FIT21) Act, which has been shepherded by Republican Congressman Patrick McHenry and would divide oversight of digital asset markets between the SEC and CFTC.
Crypto market movers
- Bitcoin is up 0.43% today at $67,258.30.
- Ethereum is down 1.30% today at $3,113.70.