Regulation
Biden reverses measure limiting SEC crypto authority
President Joe Biden vetoed a resolution limiting Securities and Exchange Commission (SEC) on the cryptocurrency sector.
Biden announced the veto Friday evening, May 31, claiming that the legislation would have limited the ability of regulators to develop guidelines for the crypto industry.
“Appropriate safeguards that protect consumers and investors are necessary to harness the potential benefits and opportunities of crypto-asset innovation,” Biden said.
“My administration looks forward to working with Congress to ensure a comprehensive and balanced regulatory framework for digital assets, building on existing authorities, that will foster the responsible development of digital assets and payments innovation and help to strengthen the leadership of the United States in the global financial system. .”
The move would have ended the SEC’s special rules for crypto asset custodians, a move supported by both the digital assets industry and the banking industry. Congress passed the law last month, but the White House said the president planned to veto it.
The veto follows last month’s passage of the Financial Innovation and Technology for the 21st Century Act (FIT21) by the U.S. House of Representatives, which establishes a federal framework designed to ensure regulatory certainty for digital assets and provide key protections for consumers.
“The bill, which was first passed in the House in 2023, passed the House by a vote of 279 to 136, with 208 Republicans and 71 Democrats voting to approve it,” PYMNTS recently wrote. “Its bipartisan passage shows just how far the struggling crypto sector has progressed, from a regulatory perspective, in America.”
But the adoption was not without controversy. On the morning of the vote, SEC Chairman Gary Gensler said the cryptocurrency bill undermine the work of his agency.
The legislation, Gensler noted, “would create new regulatory gaps and undermine decades of precedent for oversight of investment contracts, thereby exposing investors and capital markets to immeasurable risks.”
And the Biden administration has also opposed the legislation, saying it “lacks sufficient protections for consumers and investors who engage in certain digital asset transactions,” at least in its current form.
“However, the bill was adopted, providing glimmer of hope to an industry that has long lamented the lack of regulatory clarity around its operations in the United States,” PYMNTS wrote.