U.S. President Joe Biden has vetoed a bill that sought to overturn a Securities and Exchange Commission (SEC) bulletin establishing accounting standards for firms that custody cryptocurrency.
In a letter dated May 31, Biden stated, “This reversal of the considered judgment of SEC staff in this way risks undercutting the SEC’s broader authorities regarding accounting practices.” The bill aimed to repeal the SEC’s cryptocurrency accounting guidelines, which mandate that institutions holding crypto assets record them as liabilities on their balance sheets.
Biden emphasized, “My Administration will not support measures that jeopardize the well-being of consumers and investors. Appropriate guardrails that protect consumers and investors are necessary to harness the potential benefits and opportunities of crypto-asset innovation.”
Earlier this month, both the House and Senate voted in favor of repealing the SEC’s staff accounting bulletin, known as SAB 121. The guidance directs financial institutions holding crypto to keep the assets on their balance sheets, a measure critics argue complicates the involvement of financial institutions with crypto companies.
The House passed the measure with a 228-182 vote, predominantly supported by Republicans, although 21 Democrats also voted in favor. A week later, the Senate voted 60 to 38, with several Democrats, including Senate Majority Leader Chuck Schumer of New York, supporting the measure.
Overturning a presidential veto requires a two-thirds majority from both houses of Congress.
Slap in the Face, or Commendable?
Biden’s controversial decision was immediately met with criticism from the cryptocurrency industry. The Blockchain Association, a crypto advocacy group, expressed their disappointment in a May 31 post on X (formerly Twitter), stating, “We’re disappointed that the administration chose to overrule bipartisan majorities in both Houses of Congress who recognized the harm created by SAB 121.”
Cody Carbone, chief policy officer at the Digital Chamber, also criticized the veto, describing it as “a slap in the face to innovation and financial freedom.”
The veto has raised concerns within the crypto community, especially as it appears to contradict speculations that Biden’s campaign has been engaging with crypto industry players to adopt a more pro-crypto stance.
“If it’s in fact true that the Biden campaign is communicating with cryptocurrency thought leaders, I commend them. I’ve publicly been encouraging them and the President not to make the mistake of conceding on this issue nor to ignore its importance to the future of our nation. Crypto is here to stay, and it’s imperative that we hear from BOTH candidates on their perspective and plans for how to integrate crypto into our financial systems,” said Moe Vela, senior advisor to Unicoin and former senior advisor to Biden, in a statement to crypto.news.
Sheila Warren, CEO of Crypto Council, added, “Disappointed but not surprised by the veto of SAB121 CRA—as I often say, silence is golden, because some positions once publicly stated wind up being tough to walk back.”
Biden’s decision underscores the ongoing tension between regulatory authorities and the rapidly evolving cryptocurrency industry. As debates continue, the future of crypto regulation remains uncertain, with stakeholders on both sides closely monitoring the developments.
