Senator Elizabeth Warren expressed her support for the SEC's Staff Accounting Bulletin (SAB) 121 during a Senate hearing on May 16. She emphasized that the bulletin, which pertains to companies involved in cryptocurrency, aims to provide clear accounting guidance.

Warren clarified that SAB 121's purpose is to outline how companies should account for crypto-related risks and ensure these risks are transparently disclosed. These risks include incidents like hacks, thefts, and the loss of crypto assets when custodian companies face insolvency.

She stated:

"Today's vote is about ensuring that the SEC can issue guidance that helps companies create robust, consistent, timely, and informative accounting disclosures."

Warren emphasized that the bulletin does not mandate crypto platforms to include customers' crypto holdings on their balance sheets, contradicting previous statements by House Financial Services Committee Chairman Patrick McHenry. McHenry had suggested that the bulletin required financial institutions and custodial firms to report customers' digital assets on their financial statements.

Moreover, Warren clarified that SAB 121 does not confer ownership of customers' crypto assets to the platforms holding them.

Ahead of the Senate vote on HJ Res. 109, which aimed to overturn the bulletin, Warren opposed the vote itself, arguing:

"We should not be holding this vote, and that alone is sufficient reason to vote against it."

She argued that the SEC had published the bulletin over two years ago, exceeding the time limit for congressional review. Additionally, she asserted that the Congressional Review Act (CRA) does not apply to staff bulletins, as they do not possess the force of law and are not subject to public notice and comment.

Contrary to Warren's position, the US Government Accountability Office (GAO) classified SAB 121 as a rule under the CRA in October 2023.

Despite the Senate's majority vote to rescind SAB 121 on May 16, following the House's earlier advancement of HJ Res. 109 on May 8, President Joe Biden plans to veto the resolution. The Senate vote did not yield a sufficient majority to override a presidential veto.

Biden has up to 10 days from the bill's arrival on his desk to issue the veto.