U.S. President Biden Vetoes Resolution Aimed at Overturning SEC Crypto Guidance

U.S. President Joe Biden announced on Friday afternoon that he has vetoed a House Joint Resolution designed to repeal the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121.

SAB 121 has been a contentious piece of SEC guidance, directing financial institutions that hold cryptocurrencies for customers to record these assets on their own balance sheets. Critics argue that this requirement creates significant barriers for financial institutions wanting to collaborate with crypto companies.

In his statement regarding the veto, Biden emphasized his commitment to safeguarding consumer and investor interests, stating he would not support any “measures that jeopardize the well-being of consumers and investors.”

“Invoking the Congressional Review Act through this Republican-led resolution would unduly restrict the SEC’s capacity to establish necessary protections and address emerging issues,” Biden’s statement read. “Overturning the SEC staff’s considered judgment in this manner could undermine the SEC’s broader authority over accounting practices.”

Biden reiterated his willingness to work with Congress on crafting legislation for the digital asset market, stressing the need for “appropriate guardrails that protect consumers and investors.”

The veto came shortly after banking groups and members of Congress had sent letters urging Biden to sign the resolution to overturn SAB 121.

One letter from banking organizations argued that the guidance effectively prevents regulated banking groups from offering custody services, as noted by the Government Accounting Office. Lawmakers’ letters asked the administration to collaborate with the SEC to rescind the guidance if Biden planned to veto the resolution, as he had indicated before the House vote.

The resolution had passed both chambers of Congress with significant majorities.

Earlier on Friday, Senator Ron Wyden (D-Ore.), a member of Biden’s party who supported the resolution, criticized the guidance during CoinDesk’s Consensus 2024 conference in Austin, Texas. Wyden noted that the guidance imposes different standards for crypto compared to other assets in the financial sector.