Biden backs Gensler as House advances resolution to power-check SEC 

Gensler, who has in the past denied that he is working against the clock, could be looking at a serious uphill battle after November should the Senate or the White House flip

article-image

Joe Biden | Consolidated News Photos/Shutterstock modified by Blockworks

share

President Joe Biden has promised to back Securities and Exchange Commission Chairman Gary Gensler after a resolution to overturn an agency accounting practice advanced out of the House Wednesday evening. 

The House on Wednesday approved joint resolution 109 — which would invalidate the SEC’s Staff Accounting Bulletin (SAB) 121 — in a 228-182 vote. The measure now moves on to the Senate, but Biden’s administration warned it would veto the resolution if it makes it to the president’s desk.

“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,” the Biden administration wrote in a statement Wednesday. 

SAB 121, introduced in March 2022 and enacted the following month, states that digital asset custodians should report a liability and “corresponding assets” on their balance sheets for all custodied cryptocurrencies. The practice, SEC staff said, is intended to guard against the “significant risks and uncertainties associated with safeguarding crypto assets.” 

Reps. Mike Flood, R-Neb., Nick Wiley, D-N.C., Tom Emmer, R-Minn., Darren Soto, D-Flo., and French Hill, R-Ark., introduced the joint resolution in the House in February. 

“The SEC issued SAB 121 without conferring with prudential regulators despite the accounting standard’s effects on financial institutions’ treatment of custodial assets, and the SEC issued SAB 121 without going through the notice-and-comment process,” Rep. Flood said of the resolution in a statement earlier this year. “In the face of overreach by a regulator, it is the role of Congress to serve as a check.” 

Read more: SEC failed to follow the Congressional Review Act, may have broken the law

While SABs are not enforceable rules under securities law, they are used by staff for interpretations and practices, the SEC said. Unlike traditional rules issued by the agency, SABs do not require public notice or comment periods and do not reflect the official approval of Commissioners, a point Flood and his co-sponsors find troubling. 

All voting House Republicans were in favor of passing the joint resolution Wednesday. 21 Democrats also supported the measure.

Senator Cynthia Lummis, R-Wyo., a long-time crypto supporter, introduced a companion joint resolution in the Senate, although she lacked bipartisan support. Lummis’ effort has not advanced to Committee markup or a vote, and now that the House’s resolution is making its way to the Senate, the measure is all but dead. 

Gensler in December 2023 defended SAB 121, saying it was “just a staff accounting bulletin,” and it is consistent with precedent set in US bankruptcy court. 

Read more: Empire Newsletter: The SEC’s internal rift

“It basically addresses whether liabilities should be on balance sheet, and what we have found actually in bankruptcy court, time and again, many times now, that indeed bankruptcy courts have said that crypto assets are not bankruptcy remote,” Gensler said during a Dec. 2023 appearance hosted by the American Bar Association. 

Gensler, who has previously denied that he is working against the clock, could face significant headwinds in advancing his agenda after this year’s election. Should Republicans gain control of both chambers in November, additional efforts to overturn and undermine agency policy are likely to continue.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Featured.png

Research

Helium stands at a pivotal moment in its evolution as a decentralized wireless network, balancing rapid growth, economic restructuring, and global expansion. With accelerated growth in domestic DAUs and Hotspots supporting its network, Helium is leveraging strategic partnerships and innovative proposals to scale internationally. The recent implementation of HIP 138, “Return to HNT,” has unified its token economy under HNT, simplifying participation and strengthening liquidity, while HIP 139’s phase-out of CBRS refocuses efforts on scalable Wi-Fi offload. Meanwhile, governance shifts under HIP 141 raise questions about centralization as Nova Labs consolidates control over the roadmap.

article-image

The DeFi Education Fund has ideas on how the crypto-friendly SEC can bring Commissioner Peirce’s vision to life

article-image

“Be prepared to do more with less,” Framework Ventures’ Michael Anderson said

article-image

Q1 may have been “frustrating,” but things are looking brighter for Q2

article-image

Tokens worth 20% of the current supply of the TRUMP memecoin launched by the president are set to be unlocked tomorrow

article-image

A crypto-industry lawsuit is “moot” now that Joint Resolution 25 has been signed into law

article-image

Fed Chair Powell assured markets that the labor market is in “good place,” dependent on price stability