President Joe Biden has vetoed a resolution to overturn the US Securities and Exchange Commission's (SEC) Staff Accounting Bulletin (SAB) No. 121.
The resolution to repeal the SEC's guidelines had previously garnered strong bipartisan support in Congress. The House of Representatives voted 228 to 182 in favor of the repeal, and the Senate followed with a 60 to 38 vote.
Despite these votes, Biden chose to uphold the guidelines, triggering discontent within the crypto community.
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The SAB 121 guidelines, which were set to take effect on April 11, mandate that banks include customers' digital assets on their balance sheets, a requirement criticized for hindering innovation.
In his May 31 letter explaining the veto, Biden emphasized the necessity of maintaining the SEC's authority. He wrote:
This reversal of the considered judgment of SEC staff in this way risks undercutting the SEC’s broader authorities regarding accounting practices. My Administration will not support measures that jeopardize the well-being of consumers and investors.
Biden added that his administration is committed to collaborating with Congress to establish a balanced regulatory framework for crypto, enhancing the responsible development of digital assets and payment innovation, and thereby strengthening the US leadership in the global financial system.
The response from the crypto community was immediate and critical, with many expressing their frustration on social media platforms. Cody Carbone, chief policy officer at the Digital Chamber, described the veto as "a slap in the face to innovation and financial freedom."
Ripple CEO Brad Garlinghouse also criticized the decision, stating:
To say that this is incredibly disappointing from this White House - at an incredibly pivotal time - is an understatement.
The debate continues as the crypto industry grapples with the implications of this decision. Advocates for the repeal argue that the guidelines are overly restrictive, while supporters believe they provide necessary safety measures.
In other news, Senators Elizabeth Warren and Bill Cassidy have recently requested information from drug enforcement agencies on actions against the use of crypto in the fentanyl trade.
