U.S. House to Reconsider Bill Nullifying Crypto Custody Accounting Guidance

U.S. House to Reconsider Bill Nullifying Crypto Custody Accounting Guidance

House members will vote next week on reversing President Biden's veto of a bill to nullify a controversial accounting standard for cryptocurrency custody. The bill, known as a resolution of disapproval under the Congressional Review Act, would overturn the Financial Accounting Standards Board's (FASB) Accounting Standards Update (ASU) No. 2018-15, also known as SAB 121. The rule requires public companies to record crypto assets held in custody for third parties as liabilities, which critics argue is overly burdensome and does not reflect the true nature of crypto assets. The House passed the resolution in March with a vote of 238-186, but Biden vetoed it in May, arguing that the rule "provides critical information to investors about the risks associated with holding crypto assets." To override Biden's veto, the House and Senate must both pass the resolution again by a two-thirds majority. The timing of the reconsideration vote in the House has not yet been announced. The reconsideration vote comes as the crypto industry continues to push for regulatory clarity. In a recent letter to the SEC, a group of industry trade associations urged the agency to provide more guidance on crypto asset accounting, arguing that the current lack of clarity is hindering the growth of the industry.