Biden Vetoes Bill Overturning SEC Crypto Accounting Standard SAB 121 – Here’s What That Means
President Joe Biden has vetoed a resolution aimed at overturning the U.S. Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin (SAB) No. 121.
Biden argued that challenging the proposed guidelines would compromise the SEC’s authority, leading him to veto the resolution.
Biden Addresses SAB 121
In an official letter on May 31, Biden explained his decision, stating that reversing the SEC staff’s considered judgment in this manner could undermine the SEC’s broader authorities regarding accounting practices.
“This reversal of the considered judgment of SEC staff in this way risks undercutting the SEC’s broader authorities regarding accounting practices,” Biden wrote.
“My Administration will not support measures that jeopardize the well-being of consumers and investors.”
The controversial accounting guidelines, set to take effect on April 11, required institutions that custody crypto assets to record crypto holdings as liabilities on their balance sheets.
However, they faced significant backlash from the crypto community and lawmakers.
Lawmakers in the House of Representatives voted to repeal the SEC’s guidance, passing the bill to the Senate.
The Senate echoed the House vote and elected to repeal SAB 121 by a margin of 60-38 votes.
The decision to veto the bill has drawn frustration from the wider crypto community.
Many argue that it stifles innovation and hampers the industry during a critical time.
The Blockchain Association, a crypto advocacy group, expressed disappointment in a post on May 31.
They stated that the administration’s choice to overrule bipartisan majorities in both houses of Congress, who recognized the harm caused by SAB 121, was disheartening.
Likewise, Cody Carbone, the Digital Chamber’s chief policy officer, stated in a post on May 31 that it was a “slap in the face to innovation and financial freedom.”
Ripple CEO Brad Garlinghouse added that the decision was incredibly disappointing and came at a pivotal time for the industry.
Biden vetoes the resolution to nullify SAB 121.
Process? Who cares.
Consumer protection? No thanks.
Appeasing Gensler’s crypto vendetta? Sure thing.
This is a slap in the face to innovation and financial freedom. #Crypto #Fail pic.twitter.com/4QPhKkhN4r
— Cody Carbone (@CodyCarboneDC) May 31, 2024
House Passes Crypto Market Structure Bill FIT21
Last week, the US House of Representatives approved a comprehensive bill to establish regulatory frameworks for digital asset markets, marking a huge win for the industry.
The Financial Innovation and Technology for the 21st Century Act (FIT21) secured a 279-136 vote, with both Democrats and Republicans supporting the measure.
The FIT21 bill intends to establish a regulatory regime for US crypto markets.
It aims to introduce consumer protections, designate the Commodity Futures Trading Commission (CFTC) as a key regulatory authority for digital assets and non-securities spot markets, and provide clearer definitions of what constitutes a security or a commodity in the crypto token realm.
As reported, Patrick McHenry, House Financial Service Committee chairman, is pushing the Senate to advance the FIT21 crypto legislation before the US elections.
According to McHenry, the House’s approval of crypto market structure legislation is a “wakeup call” to take swift action.
He also stressed that Senate Majority Leader Chuck Schumer’s support and backing is important, particularly for stablecoin regulations.
