Regulation
President Biden Vetoes Crypto Bill, Defends SEC Regulations
President Joe Biden vetoed a congressional resolution to rescind the SEC’s Staff Accounting Bulletin No. 121 (SAB 121), reinforcing the administration’s commitment to strong financial regulation.
The resolution, which garnered significant support from Republicans and some Democrats, passed the House and Senate on May 16.
Biden Veto Maintains SEC Crypto Oversight
SAB 121, introduced in March 2022, requires financial institutions to report their customers’ digital assets. Critics say the rule imposes heavy operational and financial burdens on businesses dealing with cryptocurrencies. Sen. Cynthia Lummis, a key supporter of the resolution, argued that SAB 121 puts consumer assets at risk in bankruptcy by placing them on institutional balance sheets.
Facing backlash from crypto industry leaders and several lawmakers, Congress repealed SAB 121. The House of Representatives voted first, with 228 members favoring repeal and 182 opposing it. A week later, the Senate voted 60-38 to overturn the rule. However, it took more than this vote count to prevent a presidential veto.
In the statement accompanying the document, Biden stressed that his administration would not support any measures that could harm consumers and investors.
“By invoking the Congressional Review Act, this Republican-led resolution would inappropriately limit the SEC’s ability to put in place appropriate safeguards and resolve future problems. This reversal of the SEC staff’s considered judgment risks undermining the SEC’s broader powers over accounting practices. My administration will not support measures that jeopardize the well-being of consumers and investors,” Biden said.
Learn more: Crypto regulation: what are the advantages and disadvantages?
Reactions to Biden’s veto have been mixed within the crypto community. Some see it as a necessary step to protect investors, while others see it as an obstacle to financial innovation.
“The SEC’s actions that prevent highly regulated U.S. financial firms from providing custody services for Bitcoin hinder financial innovation and competitiveness. This could cause companies to relocate to countries with more favorable regulations, resulting in a loss of capital, talent and technology for the United States. For US citizens, these restrictions limit access to financial innovations and investment diversification, putting them at a disadvantage compared to those in other countries,” Manuel Ferrari, co-founder of Money On Chain & MimLABS, told BeInCrypto .
Despite the veto, Biden expressed his willingness to work with Congress on new legislation relating to the digital asset market, emphasizing the need for measures to protect investors. This decision highlights the ongoing debate over how to regulate the crypto industry while balancing innovation and consumer security.
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