President Joe Biden has vetoed a congressional resolution that sought to overturn SEC Accounting Bulletin 121 (SAB 121), reinforcing the Administration’s commitment to strict financial regulations.
The resolution, which had significant support from Republicans and some Democrats, was approved by both the House of Representatives and the Senate on May 16.
Biden’s veto maintains SEC oversight of cryptocurrencies
SAB 121, introduced in March 2022, requires financial institutions to report on customers’ digital assets. Critics argue that this rule imposes heavy operational and financial burdens on companies that operate in cryptocurrencies.
Senator Cynthia Lummis, a key supporter of the resolution, said SAB 121 puts consumers’ assets at risk during bankruptcy by placing them on institutional balance sheets.
Faced with reaction from crypto industry leaders and several legislators, Congress repealed SAB 121. The House of Representatives voted first, with 228 members in favor of the repeal and 182 against.
A week later, the Senate voted 60-38 to repeal the rule. However, More than this vote count was needed to avoid a presidential veto.
In the statement accompanying the document, Joe Biden emphasizes that his Administration will not support any measure that could harm consumers and investors.
“By invoking the Congressional Review Act, this Republican-led resolution would inappropriately limit the SEC’s ability to establish appropriate guardrails and address future issues. This reversal of the SEC staff’s considered judgment in this way risks undermining the SEC’s broader authorities regarding accounting practices. “My Administration will not support measures that endanger the well-being of consumers and investors,” Biden said.
Read more: Best cryptocurrency exchanges that do not require KYC
Reactions to Joe Biden’s veto have been diverse within the crypto community. Some see it as a necessary step for investor protection, while others see it as a barrier to financial innovation.
“The SEC’s actions preventing highly regulated US financial firms from providing custody services for Bitcoin hinder financial innovation and competitiveness. This could lead companies to relocate to countries with more favorable regulations, resulting in a loss of capital, talent, and technology to the US. For US citizens, these restrictions limit access to financial innovations and diversification of investments, 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 for the digital asset market, emphasizing the need for measures to protect investors.
This decision highlights the ongoing debate over how to regulate the cryptocurrency industry by balancing innovation with consumer safety.
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