Regulation
Biden strikes down measure limiting SEC’s crypto authority
President Joe Biden vetoed a resolution limiting the Securities and Exchange Commission (SEC) authority on the cryptocurrency sector.
Biden announced the veto Friday (May 31) evening, saying the legislation would limit regulators’ ability to develop guidelines for the cryptocurrency industry.
“Proper guardrails that protect consumers and investors are needed to take advantage of the potential benefits and opportunities of cryptocurrency innovation,” Biden said.
“My Administration looks forward to working with Congress to ensure a comprehensive and balanced regulatory framework for digital assets, building on existing authorities, that will promote responsible digital asset development and payments innovation and help strengthen industry leadership. United States in the Global Financial System.”
The measure would have ended the SEC’s special rules for cryptocurrency custodians, a move supported by both the digital asset and banking industries. Congress passed the legislation last month, but the White House had said the president intended to veto it.
The veto follows last month’s passage of the Financial Innovation and Technology for the 21st Century (FIT21) Act by the U.S. House, which establishes a federal framework designed to provide regulatory certainty for digital assets and provide critical protections for consumers.
“The bill, voted for the first time in the House in 2023, passed the House by a vote of 279 to 136, with 208 Republicans and 71 Democrats voting to approve it,” PYMNTS recently wrote. “Its bipartisan passage shows how far the cryptocurrency industry has come, regulatory-wise, in America.”
But the adoption did not come without controversy. On the morning of the vote, SEC Chairman Gary Gensler said the cryptocurrency bill would do that undermine the work of his agency.
The legislation, Gensler stressed, “would create new regulatory gaps and undermine decades of precedent regarding the oversight of investment contracts, exposing investors and capital markets to immeasurable risk.”
And the Biden administration has also opposed the legislation, saying it “lacks sufficient protections for consumers and investors engaging in certain digital asset transactions,” at least in its current form.
“However, the bill was passed, providing for a glimmer of hope to an industry that has long complained about a lack of regulatory clarity regarding its operations in the United States,” PYMNTS wrote.