Biden vetoes bill overturning SEC crypto accounting rule

US President Joe Biden has vetoed a bill that sought to overturn the controversial Securities and Exchange Commission (SEC) Staff Accounting Bulletin (SAB) 121.

In a letter Addressing the US House of Representatives, President Biden reiterated his administration’s commitment to consumer and investor protection. “To capitalize on the potential benefits and opportunities of cryptocurrency innovation, adequate guardrails that protect consumers and investors are needed.”

The account a the repeal of SAB 121 had received bipartisan support in both houses of Congress. The House approved the measure with 228 votes against and 182 votes against, while in the Senate with 60 votes in favor of repeal and 38 against. However, a two-thirds majority of both the Senate and House would be needed to override a presidential veto.

Previously, the White House had expressed concern about limiting the SEC’s ability to have a framework for regulating cryptocurrencies, implying that this could lead to substantial market uncertainty and financial instability.

SAB 121 has always stirred controversy in the cryptocurrency industry as it requires cryptocurrency companies to record the amount of customers holding cryptocurrencies as liabilities on their books. Those against it argue that crypto firms may struggle to store and protect digital assets as a result.

But the SEC still considers SAB 121 “non-binding staff guidance” that improves disclosures for investors. An SEC spokesperson highlighted the risk that companies must demonstrate regarding hiding crypto-assets off-balance sheet, thus making visibility into the risks taken by custodians more important for all investors.

Time after time, we have seen crypto companies fail and we have seen their customers line up in bankruptcy court in hopes of getting what they thought was legally theirs. ”We have also seen the risks for investors in companies that safeguard these assets when they are hidden off the balance sheet. This information provides investors with important insight into the level of risk taken by cryptocurrency custodians

President Biden’s veto was criticized by Crypto Space, including many members of the Blockchain Association who expressed disappointment with the administration’s decision to override bipartisan majorities in both houses of Congress.

However, there is one thing he is adamant about: even now that cryptocurrency regulation is being discussed at length, President Biden insists on his willingness to work with Congress when drafting related laws regarding his segment market, as long as customers and investors are not left unprotected.

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