Regulation
President Biden Vetoes Cryptocurrency Bill, Defends SEC Regulations
President Joe Biden vetoed a congressional resolution seeking to overturn SEC Staff Accounting Bulletin No. 121 (SAB 121), strengthening the administration’s commitment to rigorous financial regulations.
The resolution, which garnered significant support from Republicans and some Democrats, passed both the House and Senate on May 16.
Biden’s veto maintains SEC crypto oversight
SAB 121, introduced in March 2022, requires financial institutions to report customers’ digital assets. Critics argue that this rule imposes heavy operational and financial burdens on companies dealing in cryptocurrencies. Senator Cynthia Lummis, a major sponsor of the resolution, said SAB 121 jeopardizes consumer assets during bankruptcy by placing them on institutional balance sheets.
Faced with negative reaction from cryptocurrency industry leaders and several lawmakers, Congress repealed BRS 121. The House of Representatives voted first, with 228 members in favor of repeal and 182 against. A week later, the Senate voted 60-38 to overturn the rule. However, something more than this vote count was needed to avoid a presidential veto.
In the declaration that accompanies the document, Biden He stressed that his administration will not support any measures that would harm consumers and investors.
“By virtue of relying on the Congressional Review Act, this Republican-led resolution would inappropriately limit the SEC’s ability to establish appropriate barriers and address future issues. This reversal of the SEC staff’s considered judgment risks undermining the SEC’s broader authorities regarding accounting practices. My administration will not support measures that jeopardize the well-being of consumers and investors,” Biden said.
To know more: Cryptocurrency Regulation: What are the advantages and disadvantages?
Reactions to Biden’s veto have been mixed within the crypto community. Some see it as a necessary step to protect investors, while others see it as a barrier to financial innovation.
“SEC actions that prevent highly regulated U.S. financial firms from providing custody services for Bitcoin hinder financial innovation and competitiveness. This could push firms to relocate to countries with more favorable regulations, resulting in a loss of capital, talent and technology for the United States. For American citizens, these restrictions limit access to financial innovations and investment diversification, putting them at a disadvantage compared to those in other countries,” Manuel Ferrari, co-founder of Money On Chain and MimLABS.
Despite the veto, Biden expressed willingness to work with Congress on new legislation for the digital asset market, underlining the need for measures to protect investors. This decision highlights the ongoing debate about how to do this regular the cryptocurrency industry by balancing innovation with consumer safety.
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