Biden Vetoes Resolution to Overturn SEC Crypto Guidance

Biden Vetoes Resolution to Overturn SEC Crypto Guidance

RegulationLaw

By Jakub Lazurek

02 Jun 2024 (about 1 month ago)

2 min read

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President Biden vetoes a Republican-led resolution to overturn SEC crypto guidance, citing the need for consumer and investor protection.

President Joe Biden has vetoed a resolution that aimed to overturn the SEC's Staff Accounting Bulletin 121 (SAB 121). This bulletin requires financial institutions holding cryptocurrency for clients to list these assets on their balance sheets. Critics argue this rule makes it difficult for banks to work with crypto companies. Biden's veto was announced on Friday afternoon.

In his statement, Biden emphasized consumer and investor protection. He argued that the resolution, led by Republicans, would limit the SEC’s ability to set necessary regulations. He warned that overturning the SEC's decision could weaken the agency's broader authority over accounting practices.

Biden reiterated his commitment to working with Congress to regulate the digital asset market. He stressed the importance of having safeguards to protect consumers and investors in this evolving sector.

Before the veto, banking groups and members of Congress sent letters urging Biden to sign the resolution. They claimed that SAB 121 prevents regulated banks from offering crypto custody services. Despite the resolution passing easily in both the House and Senate, Biden chose to maintain the SEC guidance.

Senator Ron Wyden (D-Ore.) criticized the guidance, stating it creates an unfair standard for crypto compared to other financial assets. He expressed these views at the CoinDesk's Consensus 2024 conference in Austin, Texas, on the same day as the veto.

The debate over SAB 121 highlights the broader issue of how to regulate digital assets. Supporters of the guidance argue it ensures transparency and accountability for financial institutions dealing with cryptocurrencies. Opponents believe it imposes unnecessary burdens and could drive crypto activities to less regulated entities, increasing risks.

Biden’s veto shows the administration's cautious approach to cryptocurrency regulation. The goal is to balance consumer protection with the need for innovation in the financial sector. This decision signals a priority on regulatory oversight and strong guardrails in the digital asset market.

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