17th May 2024 > > SAB 121.

tl;dr

The Democratic vote to overturn SAB 121 puts the political spotlight on cryptos in a most favourable way.

Market Snap

Market Wrap

Boring BTC price action. My comment earlier in the week that volatility has returned was a touch wide of the mark.

Curious Cryptos’ Commentary – 13F forms

Morgan Stanley has got involved in spot BTC ETFs.

Andrew Peel, Head of Digital Asset Markets, describes spot BTC ETFs as a "potential paradigm shift in the global perception and use of digital assets."

Curious Cryptos’ Commentary – SAB 121

On the 11th May we saw that the House had voted to overturn SAB 121, an accounting rule issued by the SEC that effectively bars banks from providing custodial services for cryptos to their clients.

If your objective is to slow the crypto revolution – perhaps because in your current employment you are barred from buying cryptos due to conflicts of interest and you don’t want to miss out on the investment opportunity of a lifetime – then SAB 121 pretty much hits the mark. My sources inform me that the plan was always to rescind SAB 121 the day of Gensler’s retirement from the SEC, though the reliability of my source may be a little compromised.

The House vote was unsurprisingly largely split along party political lines, an unfortunate state of affairs that we all wish was not the case. But it is not a situation of my making.

In an eye-opening turn of affairs, the bill to overturn SAB 121 has been passed by the Senate by 60 votes to 38. With an almost even split between the parties in the Senate there is clearly bi-partisan support for this bill. This is the most cheering news out of US politics for such a very long time. The crypto world is much buoyed by this result. I note also that Chuck Schumer, Senate Majority Leader who represents New York for the Democrats, voted in favour. Chuck is a man with some considerable influence.

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We also know that Joe Biden has stated he will veto this bill. We will find out soon enough if he is going to ride roughshod over the settled will of both houses. He might do well to heed the advice of Cody Carbone, vice president of policy for the Chamber of Digital Commerce:

"I hope the President looks at the bipartisan support of this Resolution not as a rebuke on the administration, but as consensus that no independent regulator is above the law and consumer protection should always trump personal vendettas against a disfavored industry."

Whatever the final outcome, this is all good news for cryptos. Politicians facing re-election now know that they must become more knowledgeable and therefore more accepting of the crypto revolution.