Biden vetoes bill aiming to ‘undercut’ SEC crypto authority

U.S. President Joe Biden has vetoed a bill aimed at overturning a Securities and Exchange Commission (SEC) bulletin that sets accounting standards for firms that custody cryptocurrency.

In an official letter dated May 31, Biden stated, “This reversal of the considered judgment of SEC staff in this way risks undercutting the SEC’s broader authorities regarding accounting practices.” The bill sought to repeal the SEC’s cryptocurrency accounting guidelines, which require institutions holding crypto assets to record them as liabilities on their balance sheets.

“My Administration will not support measures that jeopardize the well-being of consumers and investors,” Biden added. “Appropriate guardrails that protect consumers and investors are necessary to harness the potential benefits and opportunities of crypto-asset innovation.”

Earlier this month, both the House and Senate voted in favor of repealing the SEC’s staff accounting bulletin, known as SAB 121.

The guidance directs financial institutions holding crypto so that customers can keep the assets on their balance sheets, a measure critics argue complicates the involvement of financial institutions with crypto companies.

The House passed the measure with a 228-182 vote, mostly supported by Republicans, though 21 Democrats also voted in favor. A week later, the Senate voted 60 to 38, with several Democrats, including Senate majority leader Chuck Schumer of New York supporting the measure.

Overturning a presidential veto requires a two-thirds majority from both houses of Congress.

Slap in the face, or commendable?

Biden’s controversial decision was immediately met with criticism from the cryptocurrency industry.

“We’re disappointed that the admin chose to overrule bipartisan majorities in both Houses of Congress who recognized the harm created by SAB 121,” crypto advocacy group the Blockchain Association declared in a May 31 X post.

Cody Carbone, chief policy officer at the Digital Chamber, also criticized the veto, describing it as “a slap in the face to innovation and financial freedom.”

The veto has also raised concerns within the crypto community, especially as it appears to contradict speculations that Biden’s campaign has been engaging with crypto industry players to adopt a more pro-crypto stance.

“If it’s in fact true that the Biden campaign is communicating with cryptocurrency thought leaders, I commend them. I’ve publicly been encouraging them and the President not to make the mistake of conceding on this issue nor to ignore its importance to the future of our nation. Crypto is here to stay, and it’s imperative that we hear from BOTH candidates on their perspective and plans for how to integrate crypto into our financial systems,” said Moe Vela, senior advisor to Unicoin and former senior advisor to Biden, in a statement to crypto.news

“Disappointed but not surprised by the veto of SAB121 CRA- as I often say, silence is golden, because some positions once publicly stated wind up being tough to walk back,” Sheila Warren, CEO of Crypto Council, added.