U.S. President Joe Biden has vetoed a House Joint Resolution aimed at repealing the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121 (SAB 121). Announced on Friday afternoon, this decision aligns with Biden’s commitment to maintaining stringent regulatory measures to protect consumers and investors.
SAB 121, a contentious SEC guideline, mandates that financial institutions holding cryptocurrency for customers must report these assets on their own balance sheets. Critics argue that this guidance imposes excessive burdens on financial institutions, complicating their ability to engage with crypto companies.
In his veto statement, President Biden underscored the necessity of safeguarding the interests of consumers and investors. “I will not support any measures that jeopardize the well-being of consumers and investors,” Biden asserted. “By invoking the Congressional Review Act, this Republican-led resolution would inappropriately constrain the SEC’s ability to set forth appropriate guardrails and address future issues. This reversal of the considered judgment of SEC staff risks undercutting the SEC’s broader authorities regarding accounting practices.”
Biden reiterated his willingness to collaborate with Congress on crafting legislation that addresses the digital asset market, emphasizing the importance of implementing “appropriate guardrails that protect consumers and investors.”
The veto followed appeals from banking groups and Congress members urging Biden to sign the resolution. Banking organizations contended that SAB 121 hinders regulated banking groups from offering custody services, while lawmakers sought collaboration with the SEC to rescind the guidance if the veto proceeded.
Despite passing both chambers of Congress with substantial majorities, the resolution faced opposition from within Biden’s party. Senator Ron Wyden (D-Ore.), who supported the resolution, criticized the guidance at CoinDesk’s Consensus 2024 conference, arguing that it imposes a unique standard on crypto assets compared to other financial assets.