Regulation
Biden respects SEC crypto regulation guidelines amid industry concerns
President Joseph R. Biden Jr. vetoed House Joint Resolution 109 (HJRes. 109). This resolution sought to disapprove the U.S. Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin No. 121 (SAB 121), which provides guidance on corporate accounting practices regarding the protection of cryptoassets.
President Biden highlighted the importance of SAB 121 in his ruling, stating: “SAB 121 reflects the technical opinions of the SEC staff regarding the accounting obligations of certain companies that safeguard cryptoassets. » He criticized the resolution because it potentially limits the SEC’s power and warned that it could limit the agency’s ability to manage future difficulties and establish accurate accounting practices.
The decision comes after Congress voted to repeal cryptocurrency accounting guidelines, which require institutions to record cryptocurrency holdings as liabilities on their balance sheets. These guidelines, which are set to take effect on April 11, have faced significant backlash from the crypto community and lawmakers.
President Biden’s administration is steadfast in its commitment to protecting consumers and investors while encouraging innovation in the cryptocurrency industry. “My government will not support measures that jeopardize the well-being of consumers and investors,” he said. He highlighted the need for regulatory safeguards to ensure the benefits of digital asset innovation are safely realized.
Despite the veto, President Biden expressed his willingness to work with Congress to develop a balanced regulatory framework for digital assets. He believes that such a framework will promote responsible development and strengthen U.S. leadership in the global financial system.
Criticism Mounts Over Crypto Regulation Veto
On social media platforms, many members of the crypto community expressed their frustration and felt that the decision stifles innovation at a critical time. The Blockchain Association, a cryptocurrency advocacy group, expressed disappointment, noting that the veto went against bipartisan majorities in both houses of Congress, which recognized the potential harm of SAB 121.
Cody Carbone, policy director of Digital Chamber, expressed disappointment, calling it “a slap in the face to innovation and financial freedom.” Brad Garlinghouse, CEO of Ripple, also expressed his displeasure and added: “This is incredibly disappointing from this White House – at an incredibly crucial time – to put it mildly. »
Analysts also weighed in on the decision, including Bloomberg’s James Seyffart. suggesting that this reflects a more moderate shift than expected in the Democratic Party’s stance on crypto regulation. While some expected a complete reversal, the veto indicates a partial shift, signaling adjustments rather than overall policy change.
Nate Geraci, president of The ETF Store and host of ETF Prime, also spoke: describing the crypto industry as “the Wild West” due to its lack of regulation. He suggested that the government should allow reputable and regulated financial institutions to provide digital asset custody services. Geraci further hinted that instead of restricting the regulatory powers of the SEC, the focus should be on the management of digital assets by accredited and regulated organizations for orderly and consistent growth of the sector.
President Biden’s veto of HJRes. 109 reflects the complexities and debates surrounding crypto regulation. While demonstrating a commitment to innovation and consumer protection, it also highlights the challenges of striking a balance between regulation and promoting growth in this rapidly evolving sector.
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