Crypto Battle Looms on South Dakota Legislature Veto Day


FILE – An advertisement of Bitcoin, one of the cryptocurrencies, is displayed on a building in Hong Kong, on Nov. 18, 2021. Crypto exchange Bittrex was fined $24 million by U.S. authorities on Tuesday, Oct. 11, 2022, for helping clients evade U.S. sanctions in places such as Syria, Iran and Crimea. (AP Photo/Kin Cheung, File)

PIERRE, S.D. (KELO) — South Dakota lawmakers will return to the chambers on Monday for the final session of the 2023 legislative term with the potential for a showdown over Governor Kristi Noem’s attempt to stop a bill from becoming law.

HB-1193 is one of four vetoes from the governor that the legislature will consider that morning. It is the only one that has passed through both chambers with more than the two-thirds majority needed for a veto override.

The other three are HB-1209, which would allow hemp manufacturers to have THC content as high as 5% during processing; SB-108, which would allow underage students to consume alcohol as part of school courses; and SB-129, which would give educators the same legal protections as law enforcement and first responders against violent crimes.

Governor Noem has labelled 1193 “an attack on economic freedom”. In a letter to the legislature, she said the legislation would “expressly” exclude cryptocurrencies from the definition of money.

The bill has been the result of several years of work by the national Uniform Law Commission. South Dakota Bankers Association president Karl Adam has strongly defended it, saying that the governor and those legislators who voted against it do not understand that it would allow banks to treat cryptocurrencies as controllable electronic records and accept them as collateral.

“If we don’t adopt the UCC amendments in our state, South Dakota could be set back in comparison to other states seeking to attract new businesses,” Adam wrote in a blog post on Wednesday. “As companies find new ways to create and unlock value in digital assets, they will likely gravitate to states that pass these amendments, which give them more legal and financial certainty. We’ve already seen this happen. Just this week, North Dakota has adopted the UCC amendments.”

But a group of legislators known as the South Dakota Freedom Caucus praised the veto and issued a seven-page rebuttal on Thursday. “We’re not backing down,” Republican Rep. Aaron Aylward said in a statement, “we’re taking a stand to support our governor and her veto of this dangerous legislation.”

The House of Representatives is scheduled to open Monday at 9 a.m. and will be the first to consider 1193 and 1209. The Senate is also due in at 9 a.m. to take up 108 and 129.

Should either chamber amass enough votes for an override – 47 in the House and 24 in the Senate – that specific bill would then be moved to the other chamber for a vote.

Governor Noem was successful in her first veto of the session, blocking HB-1109 that sought to let municipalities raise the lodging-room tax to $4 or charge up to 4%.

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