SAB 121 ‘Veto Message’ In House This Week; Digital Assets Gets Senate Ag Hearing

SAB 121 this week

On Friday, House Majority Leader Steve Scalise (R, LA) announced his schedule for this week and the resolution rescinding the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121 “may” reappear.

The bottom of the schedule reads:

Legislation that may be considered:
Veto message to accompany H. J. Res. 109 – Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Securities and Exchange Commission relating to ‘Staff Accounting Bulletin No. 121’. (Sponsored by Rep. Flood / Financial Services Committee)”

What is the “veto message”?

H.J.R.109 passed both House and Senate on a bipartisan basis in May only to receive the President’s veto.

Will Republican House leaders – led by House Financial Services Chair Patrick McHenry (R, NC) – try another vote that overrides the President whose Administration seems to be reeling post-debate? Giving Democrats an opportunity to distance themselves from the President makes logical sense.

Or, will Republican House leaders simply highlight for the voting public that the Democratic President is the one who rejected the resolution which had been approved on a bipartisan basis?

Chair McHenry’s office did not respond to a request for comment.

more tips:

Wednesday – Rep. Khanna

The blockchain roundtable produced by Rep. Ro Khanna (D, CA) and highlighting Democratic interest in digital assets is still happening this Wednesday BUT the details still remain scant.

Is a senior Administration official such as chief of staff Jeff Dients attending after his mid-June meeting with crypto interests? Will Mark Cuban attend? Any other Dem leaders? It’s unclear.

But, invites have been sent for Wednesday and some in industry are scheduled to attend… so we shall see. Last Wednesday, Fox Business’ Eleanor Terrett reported the meeting will include “more than two-dozen people” and the exact location was still TBD. Read more.

what you should know: The after effects of President Joe Biden’s debate performance and questions surrounding whether he’ll continue to run for a second term are at the top of Democrats’ political priorities. Consequently, a change in tone from Democratic leadership on digital assets may not get addressed in time for the election -and it may not matter given what’s happening with the President and its potential effects on the electorate and Democratic candidates down the ballot.

Wednesday – Senate Ag

On Friday, the Senate Agriculture Committee led by Chair Debbie Stabenow (D, MI) and Ranking Member John Boozman (R, AR) announced a hearing for this Wednesday, July 10, titled simply, “Oversight of Digital Commodities” with Commodity Futures and Trading Commission Chair Rostin Behnam as a witness.  Behnam was Chair Stabenow’s senior staff counsel pre-CFTC.

See the hearing page. Proceedings will begin at 10 a.m. ET in the Russell Senate Office Building.

The content of this hearing are opaque at this point. Presumably, Chair Behnam will make his case again to the Committee saying that he’s still waiting for authorization (and budget) from Congress to provide spot market oversight that adds to his agency’s responsibilities.

The long-awaited, “2.0” version of the Digital Commodities Consumer Protection Act (DCCPA) could appear. A markup has been suggested by Chair Stabenow at the end of the month.

what you should know: Rather than imminent law, it would seem election politics are more in play here given the relatively few days remaining in the 118th Congress and Senate Democrats overall lack of interest in a digital assets regulatory framework – Lummis-Gillibrand’s RFIA efforts notwithstanding.

By bubbling up DCCPA 2.0, Senate Democrats get a shot at attracting digital asset voters and, more importantly, deflecting crypto campaign dollars away from vulnerable Democrats.

Senate Dems could try to respond to the House’s Financial Innovation and Technology for the  21st Century Act (FIT 21) which passed out of the House in May. But – tight schedule aside – taking up FIT 21 may get Dem leadership closer to law than they want. Plus, it would put the vulnerable current President in another tight spot of potentially having to veto as he did the SAB 121 resolution.

Rep. Hill on FIT 21

Rep. French Hill (R, AR), vice chair of House Financial Services (HFS) Committee and chair of its Subcommittee on Digital Assets, Financial Technology and Inclusion spoke on CNBC last Wednesday. He addressed a range of HFS hot button topics and began with expressing confidence that FIT 21 would have the support of former President Donald Trump.

Rep. Hill said: “I think our fit-for-purpose, FIT 21 Act, that we passed in the House with 71 Democratic votes, is exactly the kind of framework that President Trump would support were he re-elected and brought back to the White House… because it directs the SEC and the CFTC [on] precisely what kind of regulatory framework we need for crypto [and] for people who are innovating and starting a token-, crypto-related firm, how to trade, how to custody those assets, how to make sure consumers are protected. So that framework, I think, is the right approach, and I think that’s what I would recommend to the President that he endorse -if we haven’t passed it between now and the end of this Congress.”

See the video on X.

crypto donations

Crypto PAC Founder on Board of Mysterious Group Lobbying Congress, Running Ads – Barron’s

Investment firm Multicoin Capital promises to match SOL up to $1 million to back crypto friendly candidates – The Block 

nominations this week

In addition to tomorrow’s Federal Reserve oversight hearing at 10 a.m. ET, the Senate Banking Committee has scheduled a nominations hearing on Thursday with FDIC Chair nominee and CFTC Commissioner Christy Goldsmith Romero (D).

See noms hearing page.

Other nominees appearing on Thursday include current SEC Commissioner Carolyn Crenshaw (D), who is up for another term (and rarely speaks publicly) and CFTC Commissioner Kristin Johnson (D), who has been nominated for an Assistant Secretary role in U.S. Treasury.

what you should know: Republican participation at this hearing could be telling. The FDIC Chair role needs filling, for example, as current outgoing FDIC Chair Martin Gruenberg has been rebuked by both sides of the aisle for his role in the agency sexual harassment scandal. But, Republicans may want to delay filling this role until the next Congress and insert a Republican if former President Donald Trump wins the White House.

Also, SEC Commissioner Crenshaw’s blistering dissent on the Commission’s Bitcoin ETF approval was notable back in January. A pro-crypto Republican senator such as Sen. Bill Hagerty (R, TN) – who is scheduled to appear at a Bitcoin conference in Nashville later this month – may want to have Commissioner Crenshaw explain herself.

nominations – Hill staffer

Meanwhile, with two CFTC Commissioners on their way out, two empty seats will need to be filled at the commodities regulator.  According to Politico’s Declan Harty, one of them is a Hill staffer.

Harty says on X, “The White House is weighing Senate Ag’s Lucy Hynes and OMB official Julie Siegel for commissioner seats at the CFTC. Scott Lee, a senior counsel to Commissioner Christy Goldsmith Romero, has also been floated.” Read more in Politico (subscription).

what you should know: Ms. Hynes, who is senior counsel for Senate Ag Chair Stabenow, appeared on a digital assets and financial inclusion roundtable hosted by CFTC Commissioner Johnson in 2022. See video on YouTube.

states – anti-CBDC bill

“Disappointed to report that [Governor Roy Cooper (D, NC)] vetoed the widely supported, bipartisan HB 690, which passed unanimously in the NC House last summer and decisively in the NC Senate last week. By vetoing this bill,
[Gov. Cooper] missed an opportunity to send a clear message to the
[Federal Reserve] that North Carolina stands united against the creation of a CBDC. This veto must be overridden.” (July 5) – Dan Spuller, Blockchain Association on X

amicus briefs

Two amicus briefs were filed last week in support of Custodia Bank’s case against the Federal Reserve and its effort to get a Fed master account. See them:

more tips:

    • In Brief: Heavy Hitters File Briefs In Custodia Bank’s Precedent-Setting Fight With Feds – Cowboy State Daily


“I had a great time on the [Validated podcast] discussing how crypto has become a focal point of the 2024 elections. Now, more than ever, we must elect pro-crypto & pro-American leaders into the White House, Senate, and House of Representatives.” – Senator Bill Hagerty (R, TN) on X regarding his appearance on The Validated Podcast

“Chevron Deference case good for crypto? Is it good for the U.S.? Or is this a giant tradeoff that will lead to bad outcomes?”… with Justin Slaughter, Paradigm (July 3)- Bankless

“Interview with Tara Burchmore, Fellow at the US Senate. Tara worked for Senator Lummis and is now working for Senator Gillibrand.” (July 3) – Thinking Crypto

still more tips

Where The Top Six Potential Biden Replacements Land On Crypto – Forbes

Sam Bankman-Fried’s Campaign Spending Spree Was a Family Affair – The Wall Street Journal

Thefts From Hacks and Exploits Surge in First Half of 2024 – TRM Labs

Crypto Crash Pushes Fear & Greed Index to Lowest Since Bitcoin Traded at $17K in Early 2023 – CoinDesk

Attorneys for Tornado Cash dev Roman Storm want to move case to next year – Nikhilesh De, CoinDesk on X