Regulation
President Biden Vetoes Cryptocurrency Custody Bill
President Joe Biden vetoed HJRes. 109, a congressional resolution that would overturn the Securities and Exchange Commission’s current approach to banks and cryptocurrencies.
Specifically, the resolution targeted the SEC’s Staff Accounting Bulletin 121, which lays out rules for how banks can manage customers’ crypto assets: in effect, they must treat such assets as liabilities.
“SAB 121 reflects the technical views of the SEC staff regarding the accounting obligations of certain firms that safeguard crypto-assets,” Biden said in a declaration. “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.”
Biden went on to say that his administration “will not support measures that jeopardize the well-being of consumers and investors.”
HJRes. 109 passed with mostly Republican support, but 21 Democrats supported the resolution in the House and Senate Majority Leader Chuck Schumer was among the Democrats who supported it in the Senate.
The president had previously indicated his intention to veto the resolution, while Representative Mike Flood (the Republican congressman who sponsored HJRes. 109 in the House) supported“It is clear that there is overwhelming opposition to SAB 121, and I urge President Joe Biden to reconsider his previous statement of intent to veto the resolution.”
Organizations opposing SAB 121 include the American Bankers Association and other financial industry lobbying groups, as well as the cryptocurrency industry advocacy group Support cryptocurrencies.
“SAB 121 effectively prevents regulated banking organizations from offering large-scale digital asset custody because it treats the assets as if they were owned rather than simply held in custody by a banking organization,” the ABA and other banking groups said. sector in an open letter to President Biden.
The White House announcement left the door open for further negotiations on cryptocurrency regulation.
“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,” Biden said.