U.S. President Joe Biden vetoed a House Joint Resolution that would have blocked a controversial Securities and Exchange Commission guidance that critics say discourages banks and other financial institutions from safeguarding crypto assets.
POTUS contends overturning SEC’s Staff Accounting Bulletin (SAB) No. 121. would “jeopardize the well-being of consumers and investors” and stifle the regulator’s ability to address future issues in the crypto industry.
Biden Nixes SAB 121 Overturn
President Biden has followed through on a pledge to veto SEC’s Staff Accounting Bulletin 121 that recently passed the House and Senate.
In his statement announcing the veto decision, Biden made it clear that his Administration would not “support measures that jeopardize the well-being of consumers and investors.”
“By virtue of invoking the Congressional Review Act, this Republican-led resolution would inappropriately constrain the SEC’s ability to set forth appropriate guardrails and address future issues,” his statement said. “This reversal of the considered judgment of SEC staff in this way risks undercutting the SEC’s broader authorities regarding accounting practices,” the U.S. president said in a notice to the U.S. House of Representatives.
The (SAB) 121 bulletin has drawn controversy for over a year as it requires companies that custody crypto to record customer cryptocurrency holdings as liabilities on their balance sheets.
POTUS indicated his intent to veto the bill the same day it was passed by the U.S. House of Representatives in a 228-182 bipartisan vote. Specifically, Biden indicated that “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.”
A week later, however, the Senate also voted in favor of the measure to repeal the SEC’s accounting guidance.
The veto announcement comes shortly after the SEC’s stunning approval of several spot Ethereum ETFs, which had led many to think that the current administration was softening its stance on cryptocurrencies.
Community Backlash
Crypto community members voiced their dissatisfaction with Biden’s veto on the X platform, noting that it only suppresses innovation and impedes the sector during a crucial time.
“To say that this is incredibly disappointing from this white house — at an incredibly pivotal time — is an understatement,” Ripple boss Bradley Garlinghouse observed.
“This is a slap in the face to innovation and financial freedom,” Digital Chamber’s chief policy officer Cody Carbone posited in a Friday X post.
Crypto advocacy group the Blockchain Association also expressed utter disappointment in Biden’s move to veto despite the resolution passing both chambers of Congress with easy majorities:
“We’re disappointed that the admin chose to overrule bipartisan majorities in both Houses of Congress who recognized the harm created by SAB 121.”
